Boston REIA Members Can Attend for NO CHARGE. Guests Pay $30 at the Door. See you there

We are holding an in-depth training on one of the best ways to find those great deals, which is in the HIDDEN MARKET DEALS that nobody else knows about with veteran investor and national trainer, Tony Youngs!

What are these “hidden markets” and how do we find them? These are deals that nobody knows are for sale! They’re not listed with Realtors, they often don’t have For Sale signs out in the yard, and many times even the sellers don’t know they’re for sale until you make them an offer! Do you think you can get great deals on properties for sale when there’s no competition with you to buy them? I hope you agree with me and say “YES”!

For over 20 years, our visiting instructor, Tony Youngs, has been perfecting and creating his own unique system, strategies, and techniques for acquiring foreclosure and hidden market properties. Because of his extreme knowledge and experience, Tony has been asked to speak at real estate and entrepreneur conventions, as well as real estate broker meetings, and national investor associations to audiences that range from 40 to 46,000.

He has been a featured guest on numerous television shows, such as “Financial Freedom in America”. “American Home Buyers Alliance”, “Atlanta Live”, and “Go for your Dreams”. He is a frequent guest on radio talk shows, and has been written about in magazines and news journals. Tony has also authored material for “Best Seller” real estate books published and sold in bookstores worldwide.

This training will cover how to find the hidden deals that have no competition, how to fund them, and how to flip them!

Admission is free for 1st-time attendees. Otherwise, it is $30 admission for this training at the door or you can become an annual member to attend all monthly trainings for free and get access ALL the benefits!

If you think you’ll benefit from even just our monthly meetings, consider becoming a paid Annual Member to get access to benefits only available them. Annual Membership benefits include:

• Access to recordings of monthly meetings and webinars on special trainings and case studies on local investor experiences

• Special real estate investor trainings (extra workshops, etc.) at heavy discounts or even for free

• Real estate ebooks, forms, & calculators

• Discounts on products & services

• Networking with, and coaching, by experienced investors

• Discounts with national supply houses and vendors through National REIA

• …and much more!

Get a competitive advantage over other real estate investors by becoming a membernow! The more you LEARN, the more you EARN!

Meeting AGENDA

HUD Threatens To Sue

Landlords Who Screen

Tenants For Felonies

Evaluating Passive Real

Estate Investments

Real Life Real Estate

Investing

NREIA Says HUD Goes

1

2

3

4

5

The Home Depot Fuel

Program Flyer

6

OfficeDepotMax

Benefit Overview

7

Vendor benefits 8

A Monthly Insight Into Boston Real Estate Investors Association

May 2016

1

The Hilton

Dedham

25 Allied Dr.

Dedham,

MA 02026

(781) 329-7900

How To Find Hidden Deals – with Tony Youngs

25 Allied Drive (East Street exit off Rt. 128), Dedham, MA Tuesday, May 3, 2016

2

HUD Threatens To Sue Landlords Who Screen Tenants For Felonies

Crime: The Obama administration has just made it easier for felons to move in next door. Landlords who don’t want tenants who are going to mug their neighbors or deal drugs will now be treated as racists and potentially sued.

Last week, the Department of Housing and Urban Development issued new guidelines to landlords, warning that bans against renters with criminal convictions violate the Fair Housing Act because they disproportionately affect minorities.

In effect, the Obama regime is now outlawing criminal background checks for apartment rentals, even though such screening is critical for the protection and security of tenants and property, and serves a legitimate business need.

In a newly released 10-page missive, HUD warns landlords they can be held liable for discrimination if they deny housing over criminal records.

“HUD will use the full force of the law to protect the fair housing rights of folks who’ve been arrested or who’re returning to their communities after serving time in jail or prison,” HUD Secretary Julian Castro warned.

By “full force,” he means the “disparate impact” theory of civil-rights enforcement, which HUD claims is written into the Fair Housing Act even though the phrase appears nowhere in the statute.

Disparate impact holds businesses liable for colorblind policies and practices that may have adverse outcomes for minorities — in this case, screening all apartment applicants for criminal histories. It doesn’t matter if there is zero intent to discriminate in carrying out such polices. The policies will be condemned as racist regardless.

“The ‘disparate impact’ standard is one of the most powerful tools we have to stamp out discrimination,” Castro said. “And I want you to know that HUD will not be shy about using it.”

Even if applied evenly and neutrally across all races, HUD claims that screening policies have a discriminatory disparate impact on African-Americans who “are arrested at a rate more than double their proportion of the general population.” In other words, it asserts, landlords could be breaking the law when they refuse to rent to black ex-cons with long rap sheets — even if they have no intention of discriminating — because such a policy would likely have a disproportionate impact on them.

So now landlords, real estate agents and property managers will think twice before turning away drug dealers and thieves, even rapists, who are members of this “protected class” — even though barring high-risk tenants serves a legitimate, nondiscriminatory purpose.

This puts landlords in a terrible legal bind.

To protect themselves from federal action, they would be wise to avoid even inquiring about the criminal records of prospective tenants. But if they fail to adequately screen them and rent to one who robs or hurts a neighbor, they could be sued by the victim for negligence.

No doubt many will see no option but to raise rents to indirectly exclude criminals from their rentals, which will just end up hurting everybody who rents housing — including innocent, law-abiding tenants.

Obama’s new rule makes it easier for HUD to resettle urban minorities into affordable housing in the suburbs, as part of a controversial regulation it finalized last year — Affirmatively Furthering Fair Housing — which threatens to cut off funding to local municipalities that refuse to lift zoning restrictions on low-income housing.

The federal mandate — whose goal is racially balancing the nation, ZIP code by ZIP code — also threatens to import violent crime into the suburbs, while lowering property values and negatively impacting local schools.

As kitchen table issues go, these are major developments. Disappointingly, none of the presidential candidates are talking about them.

Evaluating Passive Real Estate Investments –

Beware Hidden Fees

TICS (Tenants in Common), 1031 Exchanges, REITS, Real Estate Mutual Funds, LLCs, Limited Partnership; the types and number of passive real estate investment opportunities are exploding. And as proclaimed by their sponsors, these investments can offer the benefits of diversification, professional management, access to “A” type properties and potential high returns as a passive investor. But how does the investor determine which investments merit his attention, and which should be eliminated outright?

The first item to evaluate is the issue of fees. The investor needs to determine exactly how much of his investment is going into real estate and how much is being eaten by fees: the larger the percentage of his investment actually purchasing the asset, the greater the chance for a good return and the less the chance of taking a loss. As an extreme example, if 20% of the investment is eaten by various fees, and only 80% of the investment is actually invested in the property, the investor faces a 20% loss of capital as soon as he makes the investment. Additionally, only 80% of his capital is working to earn income or appreciation. This is a huge amount to make up just to get back to break even.

Front End Fees

These are the fees that are taken out of your investment before the money is invested in any real estate or asset. These can include organizational fees, sponsor fees, commissions to investment advisors, legal fees, accounting fees, underwriting fees, reimbursements to sponsors or any other fees you can imagine. These fees are usually listed in the prospectus or private placement memorandum. If these fees are greater than 10% I would eliminate the investment from consideration outright. Ideally I’d rather pay no front end fees and have 100% of my money invested in the property. This is possible if the sponsor sells directly, has no selling expense and is willing to take his profit on the back end when the investment is sold or as the investment earns current income. Although “no front end fee” arrangements are rare, some sponsors do offer them. These deals will have the best chance of success.

Hidden Fees

These fees are not accounted for separately. A thorough reading of the prospectus will usually uncover these fees. An example of a hidden fee would be when the purchase of the property has already been completed and the fund is repurchasing the property from the sponsor at a higher price than the sponsor paid. If the fund is paying a commission to a real estate broker to represent itself in the transaction, then this is also a fee which must be evaluated. In summary, any money paid by the investors and not directly going to the original seller to purchase the real estate or the asset is a fee or expense which must be “earned back” by the investment before the investor can get to break even, let alone profit on the investment.

Ongoing Fees

Ongoing fees are fees paid by the investors on a continuing basis usually from the ongoing income produced by the asset. These fees can be structured a number of different ways. The sponsor may receive a straight percentage of the current income, a percentage after the investors receive a preferred return, or a fixed fee to “manage” the operation. These fees should not be confused with property management fees which are fees an investor would pay for property management whether he had invested directly or through a passive investment entity. Of course, if the sponsor is the property manager, and the property management fee is greater than the fee charged in an arms-length transaction, then the excess must be accounted for in the evaluation. Other ongoing fees would include yearly legal fees, accounting fees, directors payments, etc.

Back End Fees

These fees are usually charged when the asset is sold or as a percentage of the “profit.” Other back end fees are real estate commissions paid to brokers to sell the property, points paid to mortgage brokers to obtain a mortgage on the property, and “dissolution” fees associated with the ending of the investment entity. In any passive real estate investment, the sponsor must be provided an economic incentive for the promotion, management and risk of handling the “deal.” However, it is important for passive investors to know what they will be paying for these services. Many of these fees are difficult to quantify since they may be charged as a percentage of some profit number realizable in the future. Others may be stated as a percentage of ownership interest. To do a proper evaluation, the passive investor must look at all fees under all likely scenarios and determine exactly how many extra in fees the investment is costing him. If the investor does not have the knowledge to accurately make this determination, professional analysis is available by CPAs, real estate counselors and financial analysts.

By Don Konipol

Reprinted courtesy of Metrolina REIA, March 2008

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Real Life Real Estate Investing Deal-Finding Strategies: The Good, The Bad, and The Ugly

In almost every seminar I've ever attended, a lot of time has been devoted to teaching attendees how to find good deals. Because deal-finding IS so crucial to one’s investing success, I recently decided to look back and see which methods have generated the MOST deals and the BEST deals for me. In reviewing the 150 properties I've bought or flipped over the last 5 years, I was surprised to find that many of the "traditional" sources of great deals haven't worked for me, while some less obvious methods have been great lead generators. I’d like to share with you the results of my little inventory.

Good: The Multiple Listing Service. The MLS is essentially a catalog of all the properties listed for sale by brokers. Needless to say, some of them are good deals for investors, and some aren’t. The trick is to ferret out which properties have motivated sellers WITHOUT making offers on all of them. I've honed this skill through years of translating agent lingo like, "Handyman's special" (looks bad, smells bad, has at least one major system that doesn’t function), "needs TLC" (ugly, but not smelly, and everything works).

Why it works: Properties listed in the MLS are for sale. This may seem like an obvious statement, but some of the other methods touted as great ways to find deals involve locating owners, then finding out if they want to sell. Properties in the MLS also have the advantage that all of the information about the property is pretty much laid out for you - a major time saver. And, with the sophisticated, computerized access available to your agent, it's a matter of a few keystrokes to view all of the properties that are handyman's specials, or bank-owned, or in estate, or priced under a certain dollar figure - whatever you’d like to concentrate on.

Another reasons that the MLS has worked so well for me is that I am generally in the market for really ugly properties. Coincidentally, these are the same properties that most AGENTS prefer not to spend a lot of time with. In many cases, they're downright cooperative - particularly when I'm offering all cash and a quick closing.

Bad: Direct mail to real estate agents. In 1994, I had the brilliant idea that I might be able to find MLS-listed properties even faster if I simply let agents know what I was looking for. So I purchased 1,200 agent names from the Board of Realtors and generated a 3-part mailing send to every agent in town.

The theme of this campaign was this: if you, Ms. Agent, have a property listed that fits my criteria, I’ll make an offer and YOU get to keep the entire commission. Out rolled my brilliant campaign - all mailed first class, incidentally - and in came the phone calls. All 7 of them.

That’s right. The week after the first letters went out, we got 7 calls. We had already made offers on three of the properties; two were out of our price range; and two were overpriced listings about to expire.

The next mailing generated even more results - about 15 calls - all basically in the same categories. The final mailing, a postcard, received no notice at all. Basically, I wasted about $1400 on a campaign that generated absolutely nothing.

What went wrong: I still think that this idea has some merit, but if I do it again, I'll make some major changes. First, I'll target only the 200 or so agents who list the types of properties I buy. Second, I'll do a better job of writing the letters, emphasizing how the agent and his seller would benefit from working with me. Third, I'll make my campaign a continuous one throughout the year, testing different letters for response and mailing the best to the same agents over and over. And lastly, I'll personalize the campaign by following up with a phone call to the 50 or so best prospects. Oh well, live and learn.

Good: Ads in the Yellow Pages. For 8 years, I've had an ad in the "real estate" section of the Yellow Pages. Each year, the ad has had some variation of the wording, "I buy houses - all cash”. This ad only generates 3-4 calls a month, but for some reason the QUALITY of the calls is better than those that are generated by any other

method I've ever used. The sellers tend to be motivated, cooperative, AND have unlisted properties.

Why it's worked for me: I love that you deal with these ads once a year then forget them. While they’re pricey - up to $3500 per year - the phone company will generally bill you monthly for the cost. In addition, as one of the very few ads in the phonebook that promise to buy houses, I haven’t got much competition.

Bad: Advertised FSBOs. Properties For Sale By Owner, a.k.a. FSBOs, are a favorite for some real estate investors. I, on the other hand, have never purchased a property from an owner who advertised his property for sale rather than calling me.

I've found several problems with trying to buy FSBOs. The first is that some are not actually for sale. Some FSBOs are just “testing the market to see what kind of offer’s he’ll get. Other FSBO sellers are VERY motivated to sell, but don’t list because they want to keep all of the money from the sale. They don't want to pay a commission - but they don't want to take a lower price, either. And sometimes a seller chooses to try to sell their property by themselves because they owe too much to pay a 5%-7% commission, even if he sells it at full price.

If you are buying expensive homes creatively, these sellers are ripe for the kind of solution you offer. My strategy is to buy ugly houses cheaply and for cash, and I just don't find this type of deal in advertised FSBOs.

Good: Flyers to Targeted Neighborhoods. Last year, I had 10,000 double-sided "I buy houses" flyers printed. I hired someone to put this flyer in the door of every one, two, or three family properties they saw in my “farm”. Every 3 weeks, 3,000 of these flyers were delivered, and the response from qualified sellers was excellent. For a cost of less than $500, I made two deals that netted over $6,000.

By: Vena Jones-Cox

Continued on page 5

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NREIA Says HUD Goes Too Far!

(Cincinnati, OH) The National Real Estate Investors Association(NREIA) said today that new guidelines issued Monday by the U.S. Department of Housing and Urban Development go too far and will have a chilling effect on criminal background checks used to screen potential tenants. According to HUD, because a disproportionate number of African Americans & Hispanics have criminal records, they face potential discrimination in housing options based on race, in violation of the Fair Housing Act. National REIA believes this would severely restrict a landlord’s ability to protect residents from predictable harm & violence.

From every Congressman who rents an apartment in DC, to the poorest of their constituents in every district, has just been made less safe with HUD’s pronouncement that makes criminal background checks tantamount to discrimination.

Fair Housing Discrimination is a serious issue. No person should be discriminated based upon race, color, religion, national origin, sex, disability, or familial status. For HUD to claim that an individual’s criminal behavior should somehow be protected is a gross violation of the Fair Housing Act, and undermines the First Amendment protection of Free Association.

HUD’s flawed argument on “Discriminatory Effects Liability” makes the case that Safety, is neither a substantial nor a legitimate concern. In fact, according to HUD’s theory, until a property has residents raped, rapist shouldn’t be banned. Similarly, unless there have been murders at the property or community, murderers shouldn’t be banned. Ironically, HUD recognizes that convicted drug manufacturers and distributors can be banned, because of specific federal language, only to make exceptions for those who use drugs, or are convicted of any other criminal act!

The approach recommended by HUD, to individually consider each applicant flies directly in the face of HUD’s stated policy and directive from Congress, to treat each person equally. Today’s guidance does little more than try to make the criminal class a protected class – beyond the scope of congressional authority granted by the Fair Housing Act.

Charles Tassell, Chief Operating Officer of NREIA said “While we agree that an arrest is not a justifiable reason to deny housing, after all a person is innocent until proven guilty, the banning of convicted criminals is an entirely separate issue.”

Tassell further stated that “the safety of the renting public should not be sacrificed.”

Bad: Billboards in the same

neighborhood. Here's a lesson in

messing up a good thing: hot on the

heels of my massively successful flyer

campaign, I decided to spring for four

large billboards in the same

neighborhood. The problem was that my

marketing budget is only so big, and

buying the billboards meant stopping

the flyers. Still, I figured that the

billboards would get more attention

anyway, so I forked over the $1,800 and

got... absolutely nothing. Not one single

phone call. Not even from an unqualified

seller. Not even a wrong number.

Nothing.

The moral? Stick with what works.

Good: Flapping my gums. Luckily,

talking - a lot - is something I have little

problem with. Laugh if you will, but my

willingness to talk about what I do to

anyone who will listen - or even pretend

to listen - has made me a lot of money.

For instance, when my new hairdresser

asked me what I did for a living, I

responded that I buy and sell houses.

His immediate reaction was, "really?

How pretty do they have to be?" Long

story short: I bought his unwanted

Junker house for $4,000 and sold it for

$7,000 the same day. When my attorney

wanted to know what type of assets I

wanted to protect, I told him about my

house-buying business. Four months

later, he referred a client to me who sold

me a $35,000 property for $12,000. You

get the picture.

Bad: Using only one lead generator at

a time. In my experience, it’s best to use

at least 3 different ways of finding deals

at the same time: preferably two you’ve

used before with some success, plus one

that you’re testing. Which brings us to?

Ugly: Not knowing which of your deal-

finding strategies are working, and

which aren’t! If you’re going to spend

money on flyers or ads or telephone

pole signs or whatever, it’s very

important that you pay attention to

which methods are generating good

leads, and which are duds. In looking

over my own deals was very surprised to

discover how many great deals came

from attorney referrals - a strategy that I

haven’t pursued aggressively, but will in

the future. If you aren’t tracking your

lead generators to discover which are

working and which you should give up,

you’re wasting time and money that

could be put to use making you deals.

Reprinted from the Real Deal, a monthly

newsletter for Real Life Real Estate

Investors with permission of Vena Jones-

Cox. Get a free 3-month trial

subscription by logging onto

www.regoddess.com. One per

household, please.

Please note: You may reprint all or part

of this article without fee under the

condition of reprinting in full the above

italicized message with any portion of

the article. For more information contact

Drew White at drewwhite@att.net

Real Life Real Estate Investing continued...

5

3

Succeeding in business is about smart relationships. That’s why we created the Office Depot OfficeMax National REIA Program, a program which, as a member, you are entitled to! Participating in the program provides you with great savings, award winning customer service, and the ability to shop the way you like (online, by phone, or in-store). The Office Depot OfficeMax National REIA program is a smart way of taking care of your business. A portion of the savings you receive when you purchase your business supplies from Office Depot OfficeMax is given back to the association to help fund the activities that support and benefit you as a member.

Benefits of the Program:

Save up to 65% on 1500+ items that businesses purchase most often, including extensive discounts on national brand ink & toner. Save up to 15% off just about everything Office Depot stocks in stores and the Business Solutions Division annual catalog. Ability to Customize your Core Supply List for the products and services you use most Free Next Day Delivery on orders over $50.00* Product offerings for supplies outside of everyday office supplies such as Cleaning, Breakroom, Fur-niture, Technology, and Copy and Print. Dedicated Account Manager (carey.rhyne@officedepot.com) 855-337-6811 Ext. 12716

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Special Pricing on Copy & Print

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National REIA members receive Free next business-day delivery for orders over $50. Orders under $50, you pay $5.95 shipping, for orders under $25 you pay $7.95 for next business-day delivery. Phone in your supply order by 5 pm or fax it by 3 pm and receive next business-day delivery, FREE! (Most furniture, some technology, oversized items and special order items are excluded.)

7

Vendor Benefits

8

Reasons Why You Should Become

a Boston REIA Vendor

Vendor Members have access

to a fast growing membership

of individuals focused on

investing in real estate. This is

a built-in audience of people

that have a need for your

services. Besides the obvious

benefit of reducing your cost

to reach this pre-qualified

group, you may participate in

defined marketing and

networking opportunities.

Take full advantage of the

opportunity to promote your

product and/or service by

prominently displaying your

company’s promotional

materials and information at

our monthly meetings.

Consistent exposure to our

members on a continual basis

through our newsletter.

Vendor Member recognition

in our newsletter and website.

An exceptional value in

display advertising.

For more information

regarding the Boston REIA

Vendor Programs contact:

BostonREIA@gmail.com

Local Vendors