N E W S

Control the Deal by Controling Terms

from Chris McClatchey

N E W S L E T T E R F O RM I D - A M E R I C A A S S O C I A T I O N O FR E A L E S T A T E I N V E S T O R S

AUGUST 2016

Legislative UpdateCalendar of EventsMarket UpdateBusiness Directory

from Jeff Watson

T H E A R T O F T H E D E A L PLUS

RE INVESTMENT

W H O S E T E R M S

By requiring your tenant to carry

renters insurance, you ensure that

your property has the extra layer

of protection that you already

require. For as little as $5 a

month, your tenants can purchase

basic renter's insurance and for an

additional premium, they can add

coverage for their belongings and

valuables.

Renter's Insurance

Renters Insurance

Protects Your

Tenants & Gives

You Peace of Mind

Get a Quote!www.realprotect.com

phone: 800-579-0652 (#3)

jjohnson@realprotect.com

Protects tenant's belongings

Provides tenants with personal

liability coverage

In the case of tenant caused loss,

the renter's insurance may

become primary, thus avoiding

a claim on your policy.

Avoids you otentially becoming

liable for tenants pets and

guests.

Add a little bit of body text

housing value.

HR 5301 keeps in place key consumersafeguards set in place by Dodd-Frank suchas limits on interest and balloon payments. The Seller Finance Coalition, of whichNational REIA is a leading member has beenworking diligently to see this bill comeforward and will continue to grow thenumber of sponsors as passage is ultimatelysought.

Current sponsors include: Rep. Roger Williams (TX-25) and Rep. Henry Cuellar (TX-28), as well as original co-sponsors Rep.Jim Bridenstine (OK -1), Rep. Alan Grayson(FL-9) Rep. Mick Mulvaney (SC -5), Rep.Randy Neugebauer (TX- 19), and Rep. BobbyRush (IL-1).

The Seller Finance Coalition was formed inFebruary of 2014 to advance the inter-est of the seller fnance industry. Foundingmembers of the SFC include Glenn Lee of Texas Funding, Bob Repass and EddieSpeed of Colonial Funding Group, Scot Campbell of S.R. Campbell Properties, andDoug Smith of My House Deals. Na-tional REIA has been a member since 2015.

LEGISLATIVE UPDATE AUGUST 2016

SellerFinancingReform ison the Way

The Seller Finance Enhancement Act (HR5301) was recently introduced in Congressby Rep. Roger Williams (R-TX) and Rep. Henry Cuellar (D-TX). The bill will increase the number of allowable seller-financed properties from three to twenty-four per year. The two per month average was considered a reasonable request to the excessive restriction put in place byDodd-Frank legislation during the recession.

Additionally, HR 5301 would require the Treasury Department to study the housing fnance market over the next three years and report back to Congress with suggestions for steps to improve the sales and fnancing of these homes, especially those with valuations below $150,000 or60% of the regional median

C A L L T OA C T I O N

Your help is needed now! We needyou to contact your member ofCongress and urge passage of HR5301.

Visit NationalREIA.org/legislativefor more information and todownload a letter you can use to personally contact yourCongressman!

R E I N V E S TM EN T N EWS | 3

THE ART OF THE DEALDo you ever wonder why someinvestors do a lot of deals andother investors can’t seemto find even one deal?

By Chris McClatchey

I have wondered this for a few years. So Istarted looking for the key differences in whatmakes a successful investor. What I observedcame down to one thing. Communication!!!

When I first began to study the different typesof real estate investors, I realized investorsuniversally do four things. 1) They

generate leads; 2) They analyze thedeal; 3) They make offers; and 4) Theynegotiate. These are the four thingsthat all investors need to do on aconsistent basis to be successful.

In addition to studying the differenttypes of investors, I began to watch

4 | MAR E I .ORG

closely at their education programsand the subject matter of what theyteach. It was very interesting to methat almost all of the educatorstaught three of the four items above.Their strategies all had the samethree items packaged up. Theytaught you how to generate leads,how to analyze the deal and how towrite up the offers. Curiously, I don’trecall any of them that taught or soldon how to negotiate

As I finalized my observations, itcame to me. Everyone focuses on

When writing offers, most investors

tell the seller what they want from

them. If your offer uses words and

phrases that “take” from the seller, you

are starting the negotiation off on the

defensive. When someone is taking

something from you, your defense

mechanisms go up. We write offers

from a “giving” perspective. People are

much more receptive when you give

them something. Hence the negotiation

gets off to a better start.

If you are not doing deals or as many as

you would like, start focusing on your

communication skills. Anyone can

implement a Leads, Analysis and Offer

strategy. However, if you want to

separate yourself from the rest of

investors, you need to pract

very beginning establish the relationshipand greatly affect the outcome.

B) Successful Investors develop realrelationship with Sellers and Real EstateAgents - I call this the 7 Touch Approach.In order to develop a relationship or havea rapport with someone, it will take a least7 touches of communication with them.The more touches you have, the more of arelationship you have, the more deals getdone.

C) Successful Investors realize their offerbegins the negotiation process – Have youever heard the phrase “make a good firstimpression”? The successful investorsknow that their offer is the first impression.One of the things I teach is how to writeyour offer from a “giving” perspective andnot from a “taking” perspective.

R E I N V E S TM EN T N EWS | 5

Leads, Analysis and Offers, but only thesuccessful investors focus on Negotiation. Itis well documented that the extent of yourwealth is in direct correlation to your abilityto communicate. It’s why public speaking isthe highest paid profession on the planet.What the successful real estate investorsrealize is that the entire process isnegotiation and how they communicatedirectly relates and reflects on the success ofgetting deals done.

So here are some tips on how to be a MasterCommunicator:

A) Successful Investors realize thatCommunication = Negotiation - Thisstarts from the very beginning. From thetime a lead is generated, a relationship isstarted by taking that initial phone call.Thewords and phrases that are used in the

T.E.R.M.S The Exclusive Real EstateMillioniare System

Find Deals with No Money DownFind Leads Others Can'tGet $1000s Back at ClosingOwn Free & Clear FasterGet the Seller to Finance YouGet Zero % InterestDouble or Triple Your # of Deals

Learn How to Give the Seller what they NEED so you can Get What You WANT

Saturday, September 17th 8pm to 5mHoliday Inn, Overland Park : Lunch IncludedMember Price $49 thru 9 /14 - $69 after 9/14

Non-Member Price $79 through 9/14 - $99 after 9/14

WithChrisMcClatchey

COMMUNICATION

Hosted by Brian & Michelle WinberryWednesday Mornings at 9 amLucky Brewgrill5401 Johnson Drive, Mission

For everyone who is trying to get started in real estate or start a

new endeavor in real estate, Chris Hiebert has the tips. Be sure

to RSVP Online and join us Tuesday August 9th at the Holiday

Inn at 8787 Reeder Road from 6pm to 9pm. FREE for

Members and 1st Time Guests. All others pay $25 at the door or

$15 when they pre-regsiter at MAREI.org.

GETTING TO YOUR 1STDEAL WITH CHRIS

MEETING

WINVESTORS

FROM OTHER GROUPS >

There are many different opportunities to growwealth not only with your Self Directed IRA, butalso with a 401k, a Health Savings Account as wellas Coverdale Education Savings Accounts.

We are devoting the month of October to learningmore about investments we can use to grow theseaccounts.

Please mark your clanedar for Tuesday October 11thand Saturday October 22nd. We may add a fewmore webinar events, so watch the calendar ofevents.

BUILDING WEALTH WITH YOUR IRA

MARE I .ORG /CA L ENDAR

THE CALENDAR

Chis McClatchey has developed a systematic approach to investing which

involves his "Power of Zero" technique to purchase 80 rental units, valued at

over $5 million dollars, in the just a year and a half with No MoneyD own

and / or with Zero Percent Financing. He is going to teach you how you can

do it too at the September 13th MAREI Meeting. !Be sure to RSVP Online

and join us at the Holiday Inn at 8787 Reeder Road from 6pm to 9pm.

FREE for Members and 1st Time Guests. All others pay $25 at the door or

$15 when they pre-regsiter at MAREI.org.

THE POWER OF ZERO

MEETING

See full day workshop

page 5

OCTOBER

Hosted by Jim & Beth Kasper1st Saturday of the MonthNetworking Coffee / Denny's9001 Shawnee Mission Pkwy, Mission

1ST SATURDAYS

Hosted by Crossroads InvestmentLending & JD AsbellWhite Board Discussion7759 Shawnee Mission Pkwy, OPKS

1ST TUESDAYS

Landlord Inc of KCK3rd Tuesday of the MonthLoan Star Steak House1501 Village West, KCK

LANDLORDS

Jackson County REI GroupLast Wednesday of the Month4 West Monroe StreetBuckner, Missouri

JACKSON CO REI

I’d say the organizers have done a great job creating a welcoming , supportive, and informative ( andabsolutely unpretentious ) atmosphere. I plan to join and return. Thanks ! Good stuff!

MARKET UPDTATE june 2016

4,186homes sold

4.0% Increase over 2015

57average days on

market16.2% Decrease from 2015

97.7% of asking price1.7% Increase over 2015

$16k$16,822 average

sale priceincrease fromsame time lastyear (7.9%)

3,909pending sales9.4% Increase over 2015

8,582houses for sale27.8% decrease2.8 month supply

average: $228,951median: $192,000

Sales and prices have been going up in most areas, while the number of homes for sale andtotal months' supply of inventory have been going down. Meanwhile, many sellers have beengetting a higher percentage of their asking price, and supply continues to struggle to meetdemand. The message may be repetitive, but it is largely positive.

The national unemployment rate recently dropped 0.3 percent to 4.7 percent, but some statesfelt more of a pinch in their own figures. Similarly, the low inventory situation is showing signs ofstrain in markets where there are few homes for purchase. With an interest rate increase still inthe cards this year, combined with the American political landscape and global economicevents, a cooldown could occur by winter. Presently, however, summery growth prevails asmany locales are reaching near-record prices not seen in more than a decade.

For further detail see http://www.kcrar.com/statistics

Whose Terms?Article from Jeff Watson &WatsonInvested.com

One of the things I frequently get to do isspeak to groups of beginning investors aboutmistakes they need to avoid. One of the itemsI teach on is the importance of understandingthe terms of the deal before you actually do it.As I’ve mentioned previously, I go so far as tosay that if you cannot explain the deal in threesentences or less in a way that an 8 year old

can understand it, then you don’t understand thedeal well enough and should not do it.

I want to go a little deeper on this subject ofunderstanding the terms. Part of understandingthe terms of the deal is understanding who iscontrolling the terms. Lately, I have seen anumber of individuals who have made loans,

8 | MAR E I .ORG

either with a self-directed retirementaccount or other funds, using documents(particularly promissory notes) prepared bythe borrower. They are lending money inaccordance with terms set forth by theborrower. That doesn’t make sense to me,thus the question, “Whose terms?” Are youusing the terms set forth by the lender or

The person who controls theterms, controls the deal.

costs a little more money to have it recordedon public record, but the terms contained inthat mortgage are much more beneficial to theparty for whom I’m working. When I’mpreparing a mortgage for the title company, Ihave to be as neutral as possible. In thoseinstances, it’s clear to me that it’s a classicexample of neither party really understandingthe terms of what they are doing. They allneed to understand that I’m just following theterms as set forth in the purchase and salesagreement that has been delivered to the titlecompany, and I have no fiduciary duty toeither party.

Remember this one thing. Make sure youunderstand the terms of the deal, andwhenever possible, make sure YOU arecontrolling those terms.

be understood and controlled by the lenderis the mortgage, deed to secure debt, or deedof trust that is being used to secure the loanto a piece of real estate. I’m going to let you inon a little secret. On a somewhat regularbasis, I’m asked to prepare mortgages inconjunction with closings taking place herein northeast Ohio. I can be asked by eitherthe neutral title company which is handlingthe escrow provisions and the money in thetitle exam, or by the lender.

When I prepare a mortgage at the request ofthe neutral title company, I prepare a very brief, vanilla, short-form mortgage that isn’tmore than two pages long; however, whenI’m asked by a lender to assist in preparing amortgage, that mortgage is a much longerand more detailed document. Yes, I realize it

R E I N V E S TM EN T N EWS | 9

the borrower?

Since it is the lender’s money, I believe thelender should be able to control and establishthe terms under which their money isborrowed. Those terms include such things ashow a late fee is calculated, what happens witha default interest rate, and what requirementsare placed on the borrower to make sure taxesand insurance are properly maintained onproperty that is used to secure the loan beingmade to them. I don’t have time to cover themhere, but there are other key terms andtechnical items that need to be fully understoodand controlled by the lender before they makethe loan.

In addition to the promissory note, an equallyimportant document that needs to

Build Your TeamWith MAREI Business MembersSave time and money by starting with serviceproviders who already know your business. Who cansolve problems as they arise to help you get the dealcompleted on time and for maximum profit.

MAREI.orgCLICK ON

VISIT

businessassociates

TERMS

DIRECTORY

BUSINESSASSOCIATES

A C C U R A T E T I T L EA Full Service Title CompanyDavid Greenwww.AccurateTitleCo.com913-338-0100

A L P H A T I T L E Full Service Title CompanyPatsy Archerwww.AlphaTitleLLC.net913-498-8999

A N D E R S O N & A S S O C I A T E SLaw FirmJulie Andersonwww.MOKCLawcom816-931-2207 / 913-262-2207

A Z U R E W A T E R F R O N TLuxury Waterfront Property InvestmentBrad Reddickwww.AzureWaterfront.com800-240-3606

Find out more about each of these associates by visitingtheir website.

Or go to MAREI.org and click on Business Directory.

CROSSROADS INVESTMENT LENDING

C O N T I N E N T A L T I T L E

Investor LendingBritton Asbell and BarakTschirhartwww.KCLend.com913-766-2900

A Full Service TitleCompanySharon Bowerwww.CTitle.com913-338-3232

1 0 | MAR E I .ORG

B R I D G E M A N A G E M E N TA Turn Key Real Estate ExperienceNathan Brookswww.BridgeEquity.com913-695-8213

A Z U R E C A R P E T C L E A N I N GCarpet, Hardwoods & MoreJerry Myers & Tiffany Kroutwww.AzureCarpetCleaning.com816-668-0258

A P I AAsset Protection Insurance AgencyLindsay Griffinwww.APIAProtects.com877-752-2742

DIRECTORY

I N V E S T O R S C H O I C E F U N D I N GThe Flexible Funding SolutionL. Scott Ficinuswww.InvestorsChoiceFunding.com816-668-7223

J A M I E S O N H O M E T E A MRealtor & Property ManagementKevin Jamiesonwww.KevinJamieson.ReeceNichols.com913-384-8331

K C I N V E S TInvestment Property SellerKim Tuckerwww.KCInvest.com913-735-0018

K C M O H O M E B U Y E RProperty BuyerDon Tuckerwww.kcmoHomeBuyer.com816-200-2198

REAL PROTECTInsurance for Investors Brought to you by National REIAwww.RealProtect.com1-800-579-0652

P R I D E P R O P E R T I E S

M E R C H A N T S M O R T G A G E

Real Estate ProfessionalsMarcus and Matt Braywww.PrideProperties.com913-213-5370

Real Estate Finance CompanySusan Aubinwww.MerchantsMtg.com720-554-9480

H O M E R E N T A L S E R V I C E SKansas City Property ManagementSandy Fisher or Paul Brantonwww.Home4Rent.com913-469-6633

R E I N V E S TM EN T N EWS | 1 1

REALTY RESOURCEReal Estate BrokerageScott Tuckerwww.RealtyResourceKC.com816-406-0701

G U A R A N T E E D R A T EFirst Digital MortgageBeth Langstonwww.GuaranteedRate/com/BethLangston913-225-9323

K C C A B I N E T C O L L E C T I O N

Cabinet SourceMark YandaWebsite Coming913-980-4260

D I S C O V E R H V A C Heating & AirconditioningComplete System for $2785www.DiscoverHVAC.net816-500-2900

EXPAND YOURBUS INESSWITH MARE I

40,000professionalsNational REIA 510 MAREI Members

4 membe r bene f i t sdesigned to promotec o m m u n i t yN E T W O R K I N G : E D U C A T I O N

A D V O C A C Y : C H A R I T Y

5Key Investing Areasfor members to share knowledgeRental : Rehab : Wholesale : Notes : Creative

30+local and national service providers many with discounts

PROFESS IONALhousing provider

CERTIFICATION

$750Average Member S A V I N G S

$500 Average Home Depot Rebate$100 Average Saving Office Depot$100 Saving on 5 Training Events

$50 Savings on Other BenefitsPeople / Networking PricelessDeal Connections Priceless

JOIN TODAYmembe r s h i p$99 Annually

marei.org