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The RE Investment News - 2nd QTR 2014
The RE Investment News - 2nd QTR 2014
The RE Investment News - 2nd QTR 2014
Rehabbing Houses Collecting Judgments Accountability Are You Going to Make It?
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So if you are a wholesaler, these nicer cash flow rental properties are a great opportunity if you can procure these houses.
Next, as a recent news article I read pointed out, many of the higher priced houses, what I call a move up house, the sellers dont want to sell. The article explains how many of these home owners refinanced to a much lower interest rates and now as these rates are going up, the homeowners dont want to sell and buy a new house at a higher interest rate. For our rehabbers, this is an opportunity because there is
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April 2014
cover story
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Oh * %# &* * !
Five Things that Go Wrong with
With Rehabbing Homes
10
Home Renovation
Bad Stuff In Our Houses
12
Hard Money
Funding Your Investment Purchase
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Prohibited Transactions
Dont Destroy Your IRA
RE INVESTMENT NEWS IS PUBLISHED IN ASSOCIATION WITH MID-AMERICA ASSOCIATION OF REAL ESTATE INVESTORS 8014 State Line, Ste 210 Prairie Village, KS 66208 www.MAREInet.com 913-815-0111
Accountability
Why its Important
And How to Achieve It
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Judgments
Back Rent Collection Q & A
EVENTS
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DISCLAIMER Mid-America Association of Real Estate of Investors and the RE Investment News does not exist to render and does not give legal, tax, economic or investment advice and disclaims all liability for the action or inaction taken or not as a result of communications from or to its members, officers, directors, employees and contractors. Each individual should consult his/her own counsel, accountant and other advisors as to legal, tax, economic, investment and related matters concerning real estate and other investments. The views and opinions expressed by authors of articles contributed to this newsletter do not necessarily reflect those of the association, the board of directors or the staff.
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Karl Dunivant
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Get involved: MAREI is looking to partner with our members and business Associates for a Habitat for Humanity House Project, a Summer in July Type Project, a Blood Drive, Project Warmth and/or a Food Drive for Harvesters. If this is a project your company has been considering, or you might be willing to chair a committee to organize a community project, please email Kim@MAREInet.com.
Now more than ever, it is critical for Real Estate Investors across America to come together and to speak with one voice about all the benefits that Americans in all communities receive because the Real Estate Investor is working to provide quality housing.
From city hall to the state house to the U.S. Capitol, our elected officials are making decisions that have a huge impact on the bottom line of Real Estate Investors and their customers. Through the support of Real Estate Professionals like you, MAREI and National REIA work to represent your interests. NOW MORE THAN EVER, IT IS CRITICAL FOR REAL ESTATE PROFESSIONALS ACROSS AMERICA TO COME TOGETHER & SPEAK WITH
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There are many contractors out there who are extremely reputable but dont understand lead -based products and issues. Theyve never been taught to approach lead in a safe way, so when they disturb and expose residents to lead during a renovation, they dont understand the consequences of the dust thats created. . . . Kyle Gunion, Titan Environmental
Home Renovation
And Bad Stuff in our Houses
If youre not in the industry, not a lead-safe worker, and not properly trained, you are risking your health and the health of those within arms reach of your home renovation. Sure, you could throw on a respirator ad zip-up in a protective suit, in an attempt to decontaminate your home, but do you really know what youre doing? It may seem easier that it actually is and many property owners and handy man type businesses do attempt to make repairs with out d when repairs are not done safely and correctly, people are not only risking their own health, but also the health of their own children, pets or anyone else that they might come in contact with on a regular basis . . . . Not to mention the health of the people living in the home. When dealing with a home built before 1978, the most likely hazard found is lead paint. Lead Dust is the leading cause of lead poisoning in children and can lead to hyperactivity, lower IQs, attention deficit disorder, other health issues, coma and even death. Most children come into contact with lead dust because of a dusty or dirty home or daycare from the renovations happening in the home they live in or because their parent brings the dust home on their clothing. Because this is such an enormous concern because it takes only a very small amount of lead dust to poison a child and forever change their lives.
Because of all of these lead issues we banned lead in residential paint in 1978, we phased out lead in gas in 1986, and in 2008 the EPA started the Renovation, Repair and Painting Rule to protect the public from lead-based paint hazards associated with the renovation, repair and painting activities. The rule requires workers to be certified and train in the use of lead-safe work practices, and requires renovation, repair, and painting firms to be EPA certified. These requirements became fully effective April 22, 2010.
So what happens now in 2014? Well the EPA can randomly inspect your job sites to see if you are following all the guidelines. Failure to comply could result in fines of up to the statutory maximum of $37,500 per violation per day.
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1. Failure to establish and maintain records is the number one violation. You must keep all records for all work you have performed, records for all certified workers and proof that they were certified during the job, proof they were the ones on the job, proof of compliance, and post-renovation cleaning verifications. Be sure to take photos, get signatures, and document everything. 2. Failure to comply with work practice standards. This is very specific information that covers a wide range of work practices, including, but not limited to:
As a Real Estate Investor if we are doing the work ourselves, these rules apply to our own work. If you are hiring contractors to do the work for you, its their responsibility to make sure they comply with the RRP Rule. All Investors who renovate homes built before 1978 should at minimum take an RRP training class so you know what the rules are. You can learn more about Lead and rules and regulations pertaining to lead in the home at www.2.epa.gov.lead. Be sure to join us at MAREI for the April 8th Main Meeting featuring Kyle Gunion with Titan Environmental discussing Bad Things in our houses including Lead, Asbestos, Mold and Meth, and what we should know.
Use of machines designed to remove paint or other surface coatings through high speed operation without a HEPA vacuum attachment. Failure to contain waste from renovation activities.
3. Failure to comply with training requirements. You must obtain a training course completion certificate. 4. Failure to provide the lead hazard information pamphlet, Renovate Right, to the property owner. Document this! Obtain signature, take a photo of you delivering it, email a copy and retain documentation for 3 years. 5. Failure to obtain firm certification when required. 6. Failure to ensure trained individuals performed the renovation. 7. Failure to post signs clearly defining the work area and warning occupants not to enter prior to beginning work.
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Hard Money
Funding Your Investment Purchase
JJ Pawlowski
There are many ways to fund an investment purchase. A buyer might use cash, conventional financing, IRA funds, or an array of other ways to make the investment purchase. One common approach investors often use to fund their investment purchases, especially when rehab is involved, is with a hard money lender. A hard money lender can be a viable source of funding for your next investment purchase too.
What is a hard money lender? A hard money lender is a company or individual making a nontraditional loan to a real estate investor. This type of loan is made to a real estate investor on an investment property using a loan to value ratio. A hard money loan typically has fewer borrower qualifications and usually takes less time to complete than a traditional loan. A hard money loan often includes rehab financing to complete work to the subject property. While a hard money loan does put more emphasis on the subject property and loan to value ratio, the borrower will still have to qualify for the loan.
What is loan to value ratio? A loan to value ratio, often abbreviated LTV, is the calculation most hard money lenders use in determining the total amount of a loan for a subject property. Most hard money lenders use a 60%-70% LTV depending upon their certain loan program. For example, if a borrower wants to buy, rehab, and flip a property in a neighborhood where most properties are selling at an average of $100,000, and the hard money lender is using a 65% LTV, the borrower would expect to receive a total loan of $65,000 (65% of the value of the property, or 65% LTV). Why should I consider using a hard money lender? One of the main reasons is because a hard money lender will provide a loan a traditional bank may not provide. Many traditional banking and lending sources wont provide rehab loans to investors. If an investor is buying a property that needs work chances are a hard money lender will be one of the only lending sources able to provide a rehab loan.
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Am I working with a hard money lender or a loan broker? Googling hard money lender youll literally receive millions of results in only a fraction of a second. While some of these results may be legitimate, many will not. In addition, you want to know if the company or individual you are working with is an actual lender (making the loan) or a loan broker (finding a lender to make the loan). There is usually nothing wrong in working with a loan broker so as long as you are aware of the role the loan broker is performing. Furthermore, you want to make sure you have some parameters set with the loan broker so your personal information isnt sent all over the internet world, oftentimes referred to as shot gunning the loan. Is a hard money loan expensive? The definition of expensive depends on who you ask; its subjective to each individual. While one person may say a hard money loan is too expensive and they wouldnt consider it, another might say its the cost of doing business. An investor may also have the opinion it would be better to use a hard money lender to do the investment in order to potentially make some money versus the alternative of not using a hard money lender and therefore not being able to do the investment at all.
ing. The numbers to consider include the purchase price, rehab scope of work, lender costs, and closing costs. While it may sound simple enough, a miscalculation of one or more of these may significantly change the amount of money a borrower may have to bring to closing, or may jeopardize the loan altogether. What do I need to consider when looking at a hard money lender? A few questions to ask and understand include:
Are there any upfront or non-refundable fees? What are the loan costs? What are the loan terms? What is the LTV or max loan amount available? Is there a pre-payment penalty? (This is especially important if you are flipping the property) Are there monthly payments?
These are just a few of the initial questions you want to ask and review with the lender. Depending upon the lenders criteria, the hard money loan may or may not make sense for your specific investment purchase.
JJ Pawlowski is a Kansas City area Real Estate Investor, Broker, Property Manger and Hard Money Lender. He is joining us at the May MAREI meeting to discuss the top mistakes that investor make when working with Hard Money Lenders.
Why do the numbers matter? An investor should understand the numbers always matter in any investment! If the numbers dont make sense its not a good investment, right? As mentioned above, a hard money loan is usually calculated using a LTV approach. Because of this approach its important for the investor to understand the numbers of the deal and the parameters of the hard money loan well before signing on the purchase contract or at the clos-
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Prohibited Transactions
Dont Destroy Your IRA
REInvestment Staff
You have gone to a few workshop and learned about Self Directed IRAs that can invest in all kinds of Real Estate Transactions from options to flips, rehabs to rentals. You take the steps to set up your Self Directed IRA, you fund it and you start self directing your IRA to the same types of real estate transactions you have been doing in your own name or in your company name. But you need to be very careful to avoid prohibited transactions which using involve doing something that involves an asset your IRA owns or a transaction your IRA completed and a disqualified person. A disqualified person is you or any family member up the family tree like parents and grandparents or down the tree like your children and grandchildren or who are closely associated with you like best friends or people you may work with on a regular basis. So a disqualified transaction would involved transactions between your IRA and a disqualified person. For example your IRA buying a house from or selling one to a disqualified person. Or renting, or optioning or flipping. Likewise, a disqualified person cannot receive financial gain from an asset owned by an IRA. So you cant receive a commission for selling a house for the IRA or your property management company cannot receive a fee for managing properties for your IRA. This all seems fairly straight forward. Right?
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But what if your IRA buys a house to rehab and flip? You hire a third party company to do all the renovations and the company wants paid on a timely basis. It takes a few days to get money from the IRA so you figure you will pay the contractor yourself and then have the IRA pay you back . . . Wrong answer! You IRA needs to pay the contractor directly. Or what if you own a rental property and it needs the yard mowed on a weekly basis. You are going to do so for free, the IRA is not going to pay you. However, while this may have been overlooked in the past, it is an act of your IRA receiving services from a disqualified person . . . YOU!. And in this day and age with the government looking for all kinds of ways to get more money, finding you in violation of the rules against your IRA could be a good excuse for the IRS to cash in. So what happens if you get caught in a prohibited transaction? First the IRA will cease to exist as of the first day of the year when the prohibited transaction was committed, creating past due taxes with penalties and interest. It is even possible that a prohibited transaction that happened many years ago could if found out now, triggering penalties and taxes could possibly wipe out your entire IRA. We will be talking more about Self Directed IRAs at the monthly Member Networking meetings this quarter. See list of events on page 34.
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The main problem that problem people run into is under estimating the research and thought process that goes into a full rehab.
Oh * % # &* * !
Five Things that Go Wrong with Rehabbing Homes
Don Tucker Everybody I talk to wants to do a Rehab, because they are so simple. After all we have all lived in a house for years, and we know houses. Nothing could be further from the truth. Because I listen to my radio and know how to operate it, does not mean I can take it apart and put a new one together. There are many places that things can go wrong when Rehabbing the House from picking the wrong color paint or ordering the wrong size fridge. The main problem that problem people run into is under estimating the research and thought process that goes into a full rehab. You need to knowing how and where to look for a house to rehab. The money or finances needs to be worked out. How do you set a budget for the total project that includes purchase price and rehab cost, and a little extra. When starting a rehab you need to think the entire process through to selling the house for a profit before you ever start looking for a house. The process includes:
price point, and will increase as you market to the different types of Homeowner. Let me break this down int numbers. When visualizing your end buyer, think about the investor buyer who will pay anywhere between $ 50,000.00 to $85,000.00. The first time Home Buyer is looking to spend about $85,000.00 to $125,000.00. The experienced homeowner spends from $150,000.00 range goes up from there. The Luxury home buyer will probably be looking at houses from $400,000 and up. We dont recommend starting at this top dollar amount.
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Find the neighborhood that fits your budget and is good for re-sale. I never buy in a neighborhood if there are no sales in the past 1 year. You can find houses on the MLS by using an agent to look for them. You could run a mail campaign to look for motivated seller. Or rely or word of mouth and networking with people in the business.
To establish a rehab cost can be tricky in itself. The Contractor may want to do extra work that can create a bigger pay day for them. Have a budget in mind, and work within the numbers. Sometimes you may have to add and subtract different items to be worked on. I suggest, having a budget and add the Must Haves first. If you know it needs a roof, or a I recommend staying in a general area, the more you furnace, or a new Kitchen, and then add that first to the estimate and work backwards. Believe me there work it the more you gain knowledge of the houses is always too much you can do to a house. You deyou might want to work. Pay attention of what the cide where to put your money to get the most return houses sell for and what they are listed for. Sometimes the selling price is much lower than the listing for your buck. The more items that are needed to get the house up to a retail value, the lower the price price. Always consider the selling price when you you need to pay. My best rehabs have been when I are analyzing the house you want to buy. I take an installed a new roof, furnace and A/C unit, new Kitchaverage sell price of all the sold houses, and drop en, and new electrical service upgrade. Being able the price a couple of thousands to help price my to market that all the items listed are brand new will house. attract many more buyers. You must be able to analyze the house and put toAfter your contractor has given you a solid bid, also gether a cost estimate for repairs. This would be a good time to get a contractor involved and have him talk about how much time they will take to complete the rehab. This has been the biggest problem that I give you an estimate of what you want done. Prehear about the contractors. Ask how many people pare a Scope of Work for him to bid off of and walk the house together and get his advice and cost sav- will be working on the job, and if they will be there ing ideas. Remember the 4 numbers you must have every day. Get all this in the contract. DO NOT pay is: the Purchase Price you are paying for the house. the contractor more that 10% to start. Some will want 50%, dont do it. The way I calculate the payThe rehab cost. The ARV (After Repair Value) or price your end buyer is going to pay. The most im- ments are I know it will take 5 weeks to complete, portant number is the profit number you are planning which is reasonable. First I subtract 10% for the final payment, and 10% for the first payment. I then take to make. the remaining cost and divide by 5 weeks. The conI use a purchase analysis chart (Microsoft Excel) tractor will know how much is will be paid each week. that will equal the price I need to pay for the house. Some people I know, do not pay anything until the After putting in the ARV, Rehab cost, the selling contractor has worked a full week. You have to be price, and the profit I want to make, the equation the judge on how to start to pay your Contractor. But leaves the purchase price. In my chart I also input, the most important payment is the last. Never pay closing cost I pay when I purchase and sell, 3 months of taxes, insurance, and utilities, seller paid the contractor before they are done and you have closing costs for the buyer when I sell. If all the num- conducted a walk through with them. You will most likely have a punch list for them to complete. After bers fall into place, it is time to make offers. Knowthe punch list is complete, and you are happy with ing what you can pay takes a lot of headache, and the results, then you should pay him the remaining questions off your plate. money owed. Dont be taken back by if you pay me
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now I will get these things done this week. Hold your ground on this, you wont regret it. Its all in the name of good business practices.
details of the house, including the disclosure form, school info, a detail list of all the rehab items that was completed. I offer a Home Warranty to the buyer, and have it Treat this like a business, because paid for and active. it is a business. Another thing is if The agent puts it on MLS, and variyou have business policies, then ous other web sites to attract buyyou never have to make another ers. Some buyers will drive by and decision. My policy is we pay on call off the sign, be prepared to disFriday morning and I go over this cuss your house and know what fact during the contract process. questions to ask them. Some peoSo they know a head of time, what ple will want to get it under conto expect. When they ask for mon- tract, only to cancel when they do ey on Tuesday, then my answer is inspections. Be careful and find all ready decided. out how strong the buyer is, and if Get an expert to Market the house they are an investor or a homewhen you are ready to sell. Make owner. Most agents will only show clients who are pre-qualified to buy sure you are completely finished with the rehab before you put it on at a certain amount.
the market. I take about 60 to 80 photos, and have flyers made up. When the sign goes in the yard I have flyers in the flyer box attached to the sign. I also have a book inside the house with all the I know some investors that will stage the house with furniture and pictures. There are companies that specialize in staging houses. The house should be clean and bright, and smell like a new house.
When you have an offer and enter into negotiations, be prepared with you chart and know what your profit will be if you decide to accept a lesser offer. Sometimes a bird in the hand is worth 2 in the bush.
When I get an offer, I can almost always close the deal with some compromise. We have rehabbed a bunch of houses, too many to count. We have renovated homes for landlords and we have renovated higher priced homes. We have studies our process that allows us to renovate a house in about 5 weeks and sell it fast. We have taken that information to create my 4-5 Week Rehab Workshop that I will be offering in April. We are combining this workshop this year with a Hands On Bus Tour to view several houses around the Kansas City area. I would love to have you join me to learn more.
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Yes, it's time again for the extremely popular Rehab Workshop with Don Tucker and this time with a new twist. This year we are adding a Bus Trip on Day so we can learn How To Evaluate Properties For Re- hab. There will be a full day BUS TOUR in life houses followed by a full day Rehab Training Workshop. You Should Attend If You Are... Interested in getting started in rehabbing Interested in getting started in wholesaling Interested in learning more evaluation techniques Interested in driving around on a bus looking at houses
The Classroom
Saturday 9:00 to 4:00 Breaking Down Deals Calculating the Percentage s Negotiating your MAO Finding & Managing Contractors Creating a Scope of Work Managing the Job & the Money Contractor Paperwork & RRP Retail vs Rental Properties Selling Houses Fast
No matter where you are in your rehabbing business, you can always benefit from hearing about other ways to enhance your techniques.
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& WORKSHOP
Special Guests Curt Whitlock Discover Heating & Air (DiscoverHVAC.net) Assessing HVAC Systems. Joe Williams Cornerstone Foundation (see on Facebook) Assessing the Foundations Early Bird Pricing Thru April 16th Members $149 Add Spouse or Partner $50 MAREInet.com/Rehab
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To REGISTER
Workshop Bonuses:
PLEASE NOTE: Regular Price to attend is $169 for Members and $249 for Non-Members. To receive early bird pricing you need to register online, at the April Meeting or via phone before April 16th at 5pm. Members who are participating in our Express Success Program can attend this the Sunday Portion of this Seminar for No Charge, just call or email the office to reserve your space.
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I want my MONEY!
JUDGMENTS
Back Rent Collection Q & A
Cynthia Schmidt Can my ex-tenant go to jail for not paying the rent?
We are asked that question often. The answer is no... But, if you have heard us speak or have attended one of our Webinars or Seminars, we mention that several of our former tenants have been arrested! This happens in "post-judgment proceedings."
We get the signed order from the judge stating how much money we are owed, but it is totally up to us to get the real money to satisfy the judgment. In an attempt to get the defendant to show up to the post judgment proceedings, the judge is able to hold the defendant in Contempt of Court for failure to appear to the Rule or failure to abide by a court order, which results in a Bench Warrant/Body Attachment. A Bond is then set in which the plaintiff (landlord) can motion for turn-over. So, the defendant (tenant) is arrested for failure to appear not for the money judgment. Since we are the plaintiff's, it is up to us to initiate the whole process. It offers relief and some satisfaction that our voice for justice is now being heard and taken very seriously! We got a large dose of satisfaction recently when a former tenant of ours entered a Motion to Vacate judgment in the Eviction (Forcible Detainer) court and the 30 days had lapsed for vacating. During this time, we had already proceeded to post judgment and a Bench Warrant for her had already been issued. We attended the Motion in the Eviction court and were called to the podium where the judge reviewed the court files and stated, "I see no reason to vacate the judgment and it is past 30 days."
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He was just about to close the files when I mentioned to him, "Judge, there has been a Bench Warrant issued for her". He showed her the Warrant and motioned to the bailiff to escort the defendant to jail. She posted the bond and it was granted to us at the bond hearing. One of our most irritating, disagreeable tenants, got a taste of the landlord's power that day.
non-paying tenant that I mean business! This is when a Small Claims lawsuit is filed with the clerk of the court. The average time allowed to file after the infraction in the 50 states in 5 years. So, the investor has 5 years to pull the judgment debtor into Small Claims to obtain the judgment
At the court hearing, the Judge or Magistrate will have to be presented the rental agreement to render Finally, we have the ability state our case rationally a money judgment concerning any back rent owed. and orderly in a calm courtroom atmosphere and to When seeking judgment concerning damages above be heard and understood. Knowing all you can about the security deposit, he / she will want to see a copy the court system enables the "power." of the itemized statement concerning the deposit that was sent to the tenant 30 days before vacating and What is the tenant vacates the rental property all pictures and receipts of the excessive damages. owing back rent and / or damages above the seIf it is for the unpaid utility bills, he/she will ask for the curity deposit and or an unpaid utility bill? rental agreement that states the tenants responsibiliThe majority of real estate investors across the coun- ties concerning the utilities and the unpaid utility bills. try will rationalize to themselves I got my place Once the judgment is awarded in Small Claims back or I dont care about the money. That was not good enough for me. I didnt get into real estate Court, the Judgment Creditor will have to proceed to the post-judgment proceedings to collect. So when I investing to have my profits stolen for a non-paying hear through the grapevine that it isnt worth the patenants. I deserve every dime the tenant owes me per it is written onI challenge that statement! and I knew I had to get aggressive to prove to the
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MAREI
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Have a Product or Service To Promote to Real Estate Professionals Who Live or Invest in Kansas City
Business Membership
By far the best bang for your buck when targeting the Real Estate Professional for your product or service in the Kansas City Metro would be a Business Membership with Mid-America Association of Real Estate Investors. The business membership includes all the access to our website and all the discounts that our Standard Investor Membership. However, unlike the Investor Membership that is for the person, the Business Membership follows the Business. So as a Business you receive two guest passes to every monthly meeting (20+ meetings a year) that can be used by the same two people or interchanged among several people each month.
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ACCOUNTABLE
Why its Important
Vena Jones Cox Let me begin by saying that, personally, I like to believe that I am more than capable of defining, planning, and reaching my goals all by myself. Im pretty smart, pretty knowledgeable, and pretty driven, and I dont like other people telling me what to do. If I wanted someone standing over me, watching and judging my performance, Id have a job instead of a business. Let me now go on to say that I find that I am far more focused and effective at reaching my big goals when I have people who hold me accountable to them. Yeah, its a contradiction.
But I think that for almost everyone, there are 2 sets of priorities in life: the things you HAVE to do (go to work, clean the house, pet the dog, pet the husband, etc) and the things you dont have to do, but which bring much greater long-term rewards (flip enough deals to quit the job, buy a house, train the dog, train the husband).
The first set of goals is relatively easy to accomplish, if only because day-today life doesnt proceed very well without them. The second set is more difficult, because, in all honesty, your life wont change much if you dont flip a house this week. That particular lack of change should, of course, be viewed as a BAD thing, but if everything else is going OK (you havent lost your job or been faced with a giant medical bill or something), its not a bad enough thing to spur you into action next week. In an already-full life (which I think most of us would agree that we have), its often difficult to find the time to do something that will eventually lead us to a better life; its so much easier to tick off the must dos and put off the wanna dos until tomorrow. The Must Dos in Your Life vs. the Wanna Dos For example, the must dos in my business life include making sure a certain number of offers go out every single week: just as some of you MUST go to work every day to pay the bills, I MUST buy houses every week to keep food on the table. Wanna dos, as I use the term here, are not those fantasies that youd do in a perfect world if time or money were no object (not that I dont have a long list of THESE, too). Wanna dos are things that would have a large positive impact on your life of your business, but have very little immediate negative impact if you dont do them.
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An example of this kind of wanna do in my own business is to test adwords for my housebuying website. If I do it, I will probably get 5-10 more qualified leads each week. If I dont, nothing changes. Doing it would probably be a high leverage projectonce I figured out the right adwords, theyd continue to generate extra leads indefinitely with no more work on my part. But its not a must do in the sense that something awful will go wrong if I dont do it. For many of us, there are more of these wanna doswhat Steven Covey calls Quadrant B itemsthan you could ever reasonably complete in your entire life. And, unfortunately, these things dont tend to fall cleanly into any one period of time that you might set aside (for years, I had the fantasy that I would write my next book as soon as I had 3 weeks to devote to it. Yeah, rightturns out the only way they get written is one hour here and there for months and months and months.)
to tackle them, EVEN THOUGH they will never be nipping at your heels the way your other to-dos do, and EVEN THOUGH you will almost never get the satisfaction of completing them in one clean sweep? How Accountability Helps Get Those Important Wanna Dos Done The answer is simpleset up an accountability system with another person where you choose and name the highest-leverage wanna dos in your life, then are responsible for reporting your progress on those goals to someone else periodically. This is a very powerful arrangement that works for a number of reasons. 1. Most basically, its a lot easier to blow off your want-to-do list when you dont have to TELL someone else that you blew it off. The very act of having to say it out loud to someone else is enough to make you make progress that you otherwise wouldnt.
good thing 3. Finally, your accountability partners own progress will spur you on to bigger and better things, which will, in turn, spur THEM on, and so on. Now, lest you think I am lecturing without doing, let me say that I have not one, not 2, but THREE separate systems for doing this in my life. I have a weekly 1-hour call with a personal coach for the purpose, as well as a weekly breakfast meeting with a colleague AND an occasional mastermind meeting. Yes, it takes all of that to keep me on track. 3 Forms of Successful Accountability Partnerships Ive both seen and experienced several forms of this accountability partnership. Each has its advantages and disadvantages. They are, in no particular order:
It would be so much easier if these goals WERE simple, and closed-ended, and if the world were going to fall down around our ears if they didnt happen but the fact is, theyre not. And yet theyre importantcrucially importantto growing your life beyond its current boundaries.
So how do you motivate yourself
2. Having to come up with something to commit to for your accountability partner or partners in the first place makes you look at that whole wanna do list and decide which is the highest leverage and most do-able. Dragging out the list and examining it makes it more a part of your day to day life, which is always a
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a. Hire an accountability partner. In this case, only YOU are accountable, because the person at the other end of the line is a professional of some sort whos there to focus on YOUR progress. The advantages of this arrangement are that the other person has no vested interest in letting you beg off by saying I had a tough week or in letting you avoid or change the topic. Hes PAID to hold your feet the fire, and is willing to do so even when it makes you uncomfortable. I use a personal coach for this purposeone whos not in real estate, but knows what my goals are by virtue of the fact that weve worked on them together. I also serve as accountability coach for my FastTrack students, spending a few hours working out what the highestleverage things in their business are, then calling them semiiweekly to make sure that theyre on track with their stated goals. Its amazing how many of them will admit to doing the entire list Sunday night so that they wouldnt have to tell me on a Monday morning call that they didnt accomplish what they set out to do. And thats fine with me, because the important thing is that, unlike a lot of other people trying to build a real estate business, they do it. I couldnt care less if its 10
minutes after our last accountability call or 10 minutes before out next one, as long as it gets done! (If youre not a FastTrack student and would like to become one) you can check out the program athttp://regoddess.com/ coaching/fasttrack.asp) b. Recruit a friend, colleague, or acquaintance. This is, in some ways, the most risky methodif your partner is 1) not willing to call you on your excuses, lack of performance etc, 2) does not have your best interests at heart 3) is too competitive to want to see you succeed or 4) cannot commit to regular, scheduled contacts, they will do you no good (and, by the way, you have to be just as good a partner to them as they are to you!) For this reason, I never recommend using a spouse or significant other as an accountability partnertheres just too much chance of history and day-to-day grievances getting in the way of a good experience.
is another investor; however, she lives and works in a geographic are that I dont go into, and vice versa. c. Put together an accountability group. With the same caveats as the above, sometimes a group of 3-4 people meeting regularly has a synergy that 2 cant. Id like to share just a couple of more thoughts about this topic before I send you off to find an accountability partner: First, be sure that you understand and continually recommit to the purpose of your meetings, whether they be in person, by phone, or whatever. Your meetings have one purpose and one purpose onlyto express and report on the progress toward your goals. Do not give in to the temptation to chitchat or troubleshoot or brainstorm until AFTER youve done the important work of your meeting. Second, be sure that you, yourself, are clear on the highleverage wanna-dos in your life. If you come into your meetings with a goal of I plan to make it through this entire week without exploding or my goal is to keep breathing in and out all week long or similar have to goals, youre missing out on the power of accountability. Telling someone that youre going to do
Similarly, be careful when choosing a competitor as your accountability partner. In one sense, getting another person in your field to bounce goals off of is good; in another, youre risking the whole competition thing throwing you off track.
My weekly accountability partner
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what youre already doing or that you know you MUST do is a waste of your time and theirs. The point is to pull out some of the things you should do that you wouldnt normally do and see what you can accomplish not to keep on doing the same old same old. Third, meet regularly and frequently. Once a week or biweekly is ideal. Fourth, dont play games and dont let your partner play them, either. I once left a mastermind group for the simple rea-
son that the members did not hold each other accountable for either their behavior or their goals. When your partner gets angry because you asked him WHY he made no progress at all this week, or when you intentionally set the bar low because you just dont feel like accomplishing anything this week, you destroy the trust thats necessary for these arrangements to work Finally, overreach, but dont over-overreach. Choose goals will accomplish a lot if you reach them, and that are difficult and out of your comfort zone. DONT
tell your partner that youll do 15 of them this week! With my accountability partners, I usually have 2-3 projects each week that I lay out. With less, I dont stretch. With more, I only look at what I didnt accomplish, rather than at what I did. There is immense power in this kind of accountability. Make it your next goal to find or hire an accountability partner TODAY.
The Real Estate Goddesss Guide To Getting Your First Deal Learn Property Evaluation for Single
Multi Family Properties. Family &
How to Inspect Properties Efficiently & Estimate Repair Costs. Buying Creatively with Seller Financing and Alternative Financing. How to Find and Utilize Private Funding and When to Use Hard Money How to find desperate sellers with direct mail, bandit signs and internet marketing. How to Wholesale Houses How to Retail Houses, Sell Creatively and when to Rent Properties. How to Screen Sellers for Motivation and Negotiate the Best Deals. Understand Due Diligence, Disclosures, and What Happens at the Closing
BONUSES
for Paying in Full
How to Protect Your Assets and the Basics of Using Land Trusts Understanding Contracts and all Those Clauses and Addendums Time Management, Planning and the Importance of Systems
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Regardless of your experience or location, you can earn unthinkable interest, or find unbelievable deals to wholesale, flip, or partner on. Even Homer Simpson can do what I am going to teach you. I mean deals at 10-30% of repaired value.
You want success, right? Thats essentially the purpose of any kind of training. However, It doesnt matter how much how to you absorb, it will not cause the result you want - which is the achievement of a specific goal or milestone. How much action are you putting behind what you learn?
Let me say something to all of you out there trying to get traction in real estate investing and havent been able to do it yet. First I want to state the obvious, Dont Give Up. But now I have to give you some cold, hard facts. The only difference between the few successful people vs most other people out there is the amount of TV you watch. I know that sounds funny, but its true.
9 out of 10 people WASTE the most valuable asset they have, which is time. You cant ever get it back, and the minutes youre taking to read this is an investment in your future. Time spent watching worthless TV is robbing you of your life.
Part of this mental preparation is understanding the Disciplined Principal that you cant always give in to mental candy, which is what TV (and music) are.
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You have to lessen your donuts, i.e. the mental candy of TV and frivolous music or you cant achieve anything. Does that mean zero candy? No, of course not, we all enjoy some serenity. I just watched the game. It was good, but it was also the ONLY thing I watched. I need you to limit yourself and, understand that any hour not spent on activities toward your goals is only slowing you down. And the people that control the amount of mental candy they absorb are successful. This is a truth you must accept. Your fate hangs on this. If youre not successful, guess what? You either made mistakes taking the wrong actions, or you arent taking actions at all, which is harder to fix, sometimes impossible to fix. Cant make the horse drink right? Success is BEHAVIOR, not skill, luck, or even capital. Please tell me you are internalizing this! You need to WORK in order to get what you want. The RIGHT work, and the RIGHT amount of time applied to work make ALL THE DIFFERENCE. So say goodbye to your old life of wasting time or trying to do the least amount of work to get by, thats what losers do. Say hello to
your new life of doing what needs to be done to reach the finish line. Education and TRAINING is not the same thing. Education is not enough. You must be educated to do the proper behaviors that breed achievement.
to people preauction, and we like buying property directly from the county for pennies on the dollar! Flipping properties for fast cash is an option, but holding them can accelerate your explosive growth potential, especially if you marry holding with other profit strategies like owner financing, lease options, etc. We like buying low and holding to build a passive portfolio, thats Generational Wealth, i.e. long term financial security your kids and their kids can benefit from. I CONSISTENTLY buy property for 30 cents on the dollar. Let me be honest, I actually dont buy them for 30 cents - Im ALL IN for 30 cents. Meaning I buy them AND fix them for a TOTAL of 30% of repaired value. So Im actually buying them for 10% or less. Yes, I know, Im so clever. The truth is, there is nothing clever about it and you can do it too. The money comes from motivation and mindset, thats 90% of the battle. At Fortris, we pour ourselves into sharing decades of experience with people who simply want to know how to get money made. People who want to hear things straight and not get misled following each crumb. We put the pieces together in tax sales and we hope that opens your eyes into a whole new world of deal flow.
This is the approach I take in my own business. Ive invested in all kinds of real estate over the past 25 years and one of my favorite ways is with Tax Liens and Deeds. And Im really good at it.
I was taught this strategy over 20 years ago on how to find deals that I could do simply, in all markets, and repeat year after year to make crushing amounts of money, regardless of market conditions. Powerful Profit Potential in Tax Lien and Deed Investing One of the most enticing reasons for investing in tax sales is they are motivated people to sell, and almost no one takes advantage of tax sales to own properties. We teach 5 strategies to buy properties through tax sales that get us amazing deals. And you know what? We DONT go to auctions. Thats right, most people think Tax Sales are about buying liens at an auction, but thats the last place we look. We like liens that wont redeem, we like mailing
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Career Education Systems, Ward Pkwy Shopping Center, Top Floor 8600 Ward Pkwy, Kansas City, MO
MAREI Tampa REIA is excited to announce that Tom DiAgostino will be our special guest speaker at the June meeting on Tuesday the 10th at 6PM inside Career Education Systems Training Room on the top Floor of Ward Parkway Shopping Center in Kansas City, Missouri. . Tom will be sharing how he Creates Cash Flow with Tax Liens and Deeds. a real estate niche that most investors know nothing about. Join us at the meeting and you will learn Why auctions are not the answer, and the secret to making maximum interest How to make easy 18-36% returns without owning real estate, but enjoying its security Where to tap into the most motivated sellers on the planet with the LEAST Competition Why this is the easiest way to buy properties so cheap it feels like stealing Why there is so much meat on the bone, its hard NOT to make insane profits How to do it ALL within your IRA How we make our staff available to do it for you if you wish Tom says Regardless of your experience or location, you can earn unthinkable interest, or find unbelievable deals to wholesale, flip, or partner on. Even Homer Simpson can do what I am going to teach you. I mean deals at 10 -30% of repaired value. Ive been around the block for 25 years and done it all. This is not the flavor of the week. This training will change your financial life now and for generations to come. Stop trying to ride the next wave, only to find youre on the back end, left at sea. Were not just trainers, were your investment partners. Come join us and spend 90 min on June 10th at the MAREI meeting where Ill explain why this is the best deal source on the planet for every type of investor come back for the Saturday Seminar and I will show you how to do it! Tom will be back with MAREI on Saturday, June 14th for a Full Day Tax Sale Workshop. See page 45 for more details. We look forward to seeing you at the meeting and the training workshop!
MEETING AGENDA
6:00 pm: Meet & Greet Networking Vendor Expo 7:00 pm: Announcements 7:15 pm: Main Presentation Tom DiAgostino 8:45 pm: Late Networking
for FREE and Pre-Registered Guests for $15.00 Register Online at MAREInet.com/Main RE investment News 2014
How to CONSISTENTLY buy properties at 10-30% of Repaired Value so you make more money EACH Deal Where to get great liens at the maximum rate allowed by the state and double your money in half the time How to get Valuable properties for FREE with simple mail done for you How to use your IRA to keep 100% of the profits, compounding your wealth building What kind of diligence is necessary for the property and for title work to avoid mistakes Strategies for wholesaling, retailing, rehabbing, and landlording for maximum profit How to get the same savings on material as Toms 20 year relationships for more money in your pocket!
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