RE Investment News: March 2018

MARCH 2018

RE N E W S

INVESTMENT

NEWSLETTER OF MID-AMERICA ASSOCIATION OF REAL ESTATE INVESTORS

THIS ISSUE Real Estate News Member Benefit: Advocacy Overblown Fears Paralysis of Analysis The Note Business Business Director Member Directory

THE REAL ESTATE GODDESS: VENA JONES-COX HOW TO MAKE $5,000 TO $10,000 IN THE NEXT 30 DAYS!

MAREI.ORG

REAL ESTATE NEWS

Fake HOA Liens KCMO Interior Inspection Tenant's Right to Decline Don't get Hacked Shortage of Inventory Short Term Rentals National REIA Awards of Excellence Winner 2017

MEMBER BENEFIT MAREI Members Save 15% on Exclusive Hampton Bay Cabinets REQUEST A DISCOUNT COUPON TODAY Thanks to an exclusive arrangement with The Home Depot and National REIA, MAREI members can now save 15% on in-store purchases of in-stock & special-order Hampton Bay cabinets. However, a printed coupon must be presented at the time of purchase in order to process the discount. Members can request a coupon be mailed to them by emailing info@MAREI.org. We will verify membership and ask Home Depot to send you your coupon. Use with your 2% Member Rebate to Save Big!

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MAREI.ORG/CALENDAR

THE CALENDAR

MARCH MEETING MAKE $5 TO $10K IN THE NEXT 30 DAYS Real Estate Professional, Vena Jones-Cox wholesales on the average one house every 9 days or more and she is coming to show us how we can use wholesaling as a vehicle to earn $5,000 to $10,000 in the next 30 days. So if you are thinking about wholesaling as a business, would like to add a bit of extra income to your current business or would like to just generate more deals, join us Tuesday, March 13th.

Monthly meetings are held at the Holiday Inn at 8787 Reeder Road, Overland Park, KS. MAREI Members & First Time Guests who Pre-Register at MAREI.org attend free - all others pay $25 at the door or $15 online. As always there will be the Business Hall, the Deal Table, and Networking from 6 to 7 pm. Starting at 7, the presentation kicks off with Ten Minutes on Networking and Vena will take the stage about 7:25.

MARCH WORKSHOP See full day

Mailing Address: 6709 W 119th #332 Overland Park, KS 66209 Phone: 913-815-0111 Web: MAREI.org Web: MAREIMember.com Email: Kim@MAREI.org Views and advertising expressed in the RE Investment News are not necessarily endorsed by Mid-America Association of Real Estate Investors. The information contained within should not be construed as a recommendation for any course of action regarding financial, legal, or accounting maters by MidAmerica Association of REal Estate Investors.

Email to inquire about advertising oportunties or membership.

workshop BUILD A SIX FIGURE page 5 REAL ESTATE BUSINESS Vena Jones-Cox is joining us for a full day workshop on Saturday, March 24th for a full day workshop. She has broken the day down into two parts. In the morning she is going to be focusing on the strategies and systems for creating a wholesaling business. In the afternoon she will be focused on the top marketing strategies to generate the best deals.

This workshop has early bird pricing through Sunday, March 18th that cost a MAREI Member $49 and a Non-Member $79 and both can bring a guest for $50. After that our regular pricing is $99 for MAREI Members and $129 for Non-Members so it benefits you to join and register early. The event will be at the Holiday Inn at 8787 Reeder Road in Overland Park. Doors open at 8:30 am and Vena starts promptly at 9. Lunch should be served around noon and event will wrap up about 5:00.

OTHER GROUPS You will find a list of other groups complete with links to details that meet through out the Kansas City Metro area listed at MAREI.org/Calendar/Other-Groups

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real estate news FAKE HOA LIENS Reported on Fox 4 criminals are creating a fake homeowners association and sending out bills for homeowner association dues and getting some payments. Then for those that don't pay they are filing liens.

The homeowners in the subdivision had to hire an attorney to get the fake liens removed. In St Louis, a criminal filed a fake quit claim deed to take possession of a home.

proposed Healthy Homes Ordinance that would have required a registration fee to register all rentals and an interior inspection upon complaint.

Now a tenant advocacy group has collected 2200 signatures in an effort to get this ordinance on the ballot in April and they only need 1700 valid signatures.

Landlords and Property Managers need to take notice and take action.

it’s easy to file fake documents because the recorder of deeds in each county doesn’t have the manpower to check out the legitimacy of each claim.

For those of you on the Missouri side please educate yourself on Missouri House Bill 1510 and reach out to your Missouri Representative and ask them to support HB 1501.

INTERIOR INSPECTIONS KCMO

For those of you who live in Kansas City Missouri, be sure you are registered to vote in April.

Last fall, leaders of Kansas City metro landlord and real estate investor groups successfully talked the Kansas City Missouri city council out of the

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And for all, educate your tenants on what this could mean for them as tenants if you have higher costs,

WWW.MAREI.ORG

more regulation, and more time spent on each rental. Here at MAREI, we believe the new ordinance will increase costs for landlords not only through the registration fees but also through repair costs and time spent that would be passed on to tenants in the form of higher rents.

And it could cause some landlords to leave the business, some to update their properties and increase rents and some to update and sell their homes.

TENANT'S RIGHT TO DECLINE Missouri House Bill 1510, proposed by Missouri State Representative Gary Cross passed a major hurdle in committee on February 27th when they Voted Do Pass and sent it on to the Rules Legislative Oversite Committee.

House Bill 1510, modeled off of Kansas State Law would allow the Landlord to provide a form to their renters that explain the state law and the tenant's rights when it comes to the city or county mandated interior inspection. If passed your tenant could agree to have their home inspected, they could decline inspection this one time, or they could decline inspection for the entire time they

rent from you. If your tenant, the lawful occupant of the property declines the inspection by the city or their inspectors, then the city can't make you the landlord let them in without first obtaining a warrant.

This Bill was Amended when it passed committee to include a new section on tenants rights in regards to domestic abuse and to include a section prohibiting inspections upon the sale or transfer of property in Missouri.

So those with Kansas Rentals, make sure you learn more about this law that you already have to keep you from having to help the local municipalities violate your tenants 4th Amendment Rights.

Those in Missouri, please reach out to your own Missouri Representative and educate your tenants to help protect their own rights by reaching out to their representatives.

PLEASE TAKE ACTION 1. Go to www.MAREI.org/NO to learn more 2. Read the Bill and Amendments 3. Reach out to Your Legislator 4. Educate Your Tenants on 1510 and ask them to contact their Missouri Legislator too!

"Wholesaling Houses with Vena" Get Your FREE Copy Today!

Vena Jones-Cox wholesales on average one house every 9 days. She is an expert and she is fed up with people who do not know what they are doing representing themselves as a wholesaler and giving the industry a bad name.

To alleviate a few of the problems she has posted a 4 part series on YouTube free of charge. All you have to do is find them. MAREI has put them all together on one page for our readers to access and learn from.

Visit www.MAREI.org/VJC to access this free training today!

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004 05 05

DON'T GET HACKED

SHORT TERM RENTALS

Wire fraud schemes, which are a growing problem in real estate, have accounted for $5 billion in financial losses to consumers since 2013, according to FBI statistics. Other common schemes in real estate include fake referral emails, “overpayment” scams, and fake DocuSign emails, Maxson said.ent from you.

Two Missouri Legislators have proposed Short Term or Vacation Rental Legislation. MO HB 2457 from Sonya Anderson who brought us similar legislation in 2017 and MO HB 2569 from Keith Frederick who also brought similar legislation last year.

Be sure to protect yourself. Make sure employees and virtual assistants know not to click suspicious links, and clients should know to verify wire instructions with their you and the title company if they get an email saying the instructions have changed.

Make sure everyone know not to click links in emails from people they don't know or even from people and companies they do know without first verifying the email address is valid and not a copy.

SHORTAGE OF INVENTORY National Association of Realtors reports that .U.S. sales of existing homes fell in January from a year earlier by the most in more than three years. Wouldbe buyers were stymied by rising prices and a shortage of homes for sale.

Here in Kansas City, sales in January were up 11.1% over 2017. Prices were also up 13.6% on average and the median was up 9.7%. Our prices are staying high due to a lack of inventory with only a 1.4 months supply of houses and a 28.6% decrease in January inventory in 2018 over 2017, and if we go back to January 2017 we see a 29.8% decrease from 2016 and back to January 2016 to see a 31.8% decrease from 2015.

Houses are in very tight supply. To note the month's supply in 2015 was 3.8. KCRAR expects this to continue with fast home sales into the summer.

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Both bills are very lengthy and a bit difficult to summarize in a short space. Please visit www.MAREI.org/ShortTerm to read all the ins and outs. as well as a link to the full text of both bills.

HB 2457 is opposed by the Missouri Realtors, the Missouri Vacation Home Alliance, and the LOZ Vacation Home Rental Alliance for several reasons: 1. Provides a time frame for political subdivisions to ban vacation rentals before the law would take effect.

2. The language of "reasonable regulation" as it relates passing new regulation should instead have a "compelling reason."

3. This bill would reclassify EVERY short-term rental as a hotel or motel or lodging establishment which would make it too costly to offer short-term rentals and have a negative effect on tourism and the income that comes with tourism.

4. Proposes mandatory tourism taxes without a vote on the tourism boards or associations.

Jeremy Worley, the president of the Missouri Vacation Home Alliance, found online at www.MOVacationHomeAlliance.com asks you to reach out to your legislators to oppose HB2457 and to instead support HB 2569.

To keep up to date and to listen to the committee hearing on HB2457, visit the Facebook Group - LOZ Vacation Home Rental Alliance.

WWW.MAREI.ORG

MEMBER ADVOCACY MEMBER BENEFIT

The Advocacy Efforts of MAREI represent Property Owners, We are the voice for Real Estate Investors, Property Managers, Property Owners and Tenants in Kansas and Missouri, working to protect the Investor business. When legislation is proposed that will have an impact on the real estate industry, MAREI is here to keep you informed and provide you direction. Our goal is to encourage smart small business and a vibrant real estate investor community.

Strong Voice Investors are strongest when they speak with one strong voice and even stronger when they unite with other strong voices. We urge all members to take part in advocacy efforts from MAREI as well as other organizations with similar discussions.

Landlords: If you manage rental property we urge all members to not 08

only stay up to date with issues shared

by MAREI, but to also join your local Landlord Group. MAREI coordinates with local metro landlord groups to follow the direction of local city councils.

Realtors: Investors have a huge ally in the Realtor Lobby. While it does not coincide perfectly with the Investor Agenda, the powerful Realtor Lobby supports investor efforts where appropriate.

the federal level.

Take Action Investors do not get involved and help shape their community, others will shape it for them. No one knows the real estate investment business better than our investors.

• Be informed about issues in your community.

Apartment Owners: Investors also have a large ally in the local and national Apartment Owner Associations. If you own or manage apartments, be sure to find their associations.

• Vote in every election with an educated voice.

State and Federal: Through MAREI’s membership in state organizations like Missouri Property Owner Association, we are working to change state law in Missouri and through our Membership in National Real Estate Investors Association, to protect our industry at

• Communicate with your elected officials and make your voice heard.

• Respond to Call for action emails at the local, state and federal levels.

• JOIN MAREI See current issues at www.MAREI.org/Legislative.

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O V E R B L O W N F E A R S WHOLESALER FAQ'S

FROM VENAJONES-COX

If you’re like most people, you’ve been wondering all along when we were going to discuss all the awful things you’re imagining might happen to you as a wholesaler. And I have no desire to sugar-coat things for you, but the truth is most of the things you’re imagining are extremely rare, and easily overcome.

Here are some of the most frequently asked questions about such fears:

What happens if I can’t find a buyer for a property I have under contract?

If you can’t find a buyer, one of three things has happened: • You’ve made a bad deal, in which case your buyers have made you aware of this or; • you haven’t marketed the deal hard enough to get the right buyer or;

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• you didn’t give yourself enough time to get your buyers into the property before your inspection or partner approval clause runs out.

As you’re probably already aware, any of these 3 failures is unlikely to harm YOU, if you exercised the recommended inspection clause.

You’ll simply void the contract under that clause, or renegotiate for a lower price or more time, or in a worst case scenario, let the seller keep any earnest money as per the liquidated damages clause In the first case, you might try renegotiating the contract price or option price—you’ll know what to reoffer after you’ve shown the property to 4-5 people. In the other two cases, if you’re certain that you’ve created a good deal, you might consider paying the seller an additional, nonrefundable option fee or deposit to

extend the period of the contingency and closing. A third possibility is to buy the property yourself, although that is outside the scope of this course. Remember, as long as you have a liquidated damages clause,you’ll lose only your earnest money; if the property is controlled via an option to buy, you’ll only lose your option fee for not closing. But don’t make it a habit.

In any case, it’s important, as an ethical wholesaler, that you let the seller know as soon as possible that something has gone awry, and that you won’t be closing as promised.

What if the buyer backs out before closing?

This is far more rare than you might imagine, especially once the buyer has paid the assignment fee. In my decade plus long wholesaling RE INVESTMENT NEWS • PAGE

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career, I have had “lookers” (those are the guys who tell you they’re interested, but they have to line up money or bring their father-in-law by to take a look or come up with the assignment fee or whatever) back out dozens of times. I’ve had actual buyers—those who had actually paid the wholesale fee—back out exactly twice.

There are three important things to remember about this, the biggest fear that most new wholesalers have.

The first is that, bottom line, even if your buyer walks away on the day of closing, the only thing you have at risk (assuming you used the recommended clauses in your original purchase contract) is the amount of your earnest money.

The second is that until a buyer actually puts money up front and signs a contract to buy the property, it is not sold. Never stop marketing a deal just because a buyer SAYS he wants it.

The third is that assuming you did the right thing and collected the wholesale fee up front, you have a powerful way of negotiating an extension with your seller for the purpose of finding another buyer.

Simply offer the seller additional, non-refundable earnest money in return for an extra 30 days to close.

In the rare instance in which an actual buyer backs out, try to get him to sign a release saying that he does not intend to close. But whether or not he’ll do so, begin to market to your secondary buyers and, if necessary, let your seller know that there may be a snag in the closing.

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What if my SELLER backs out?

This is, believe it or not, the slightly more common scenario in my experience (It’s happened to me 4 times vs. 2 for the buyer backing out).

If the seller tries to back out (or renegotiate after he’s already signed the contract, which also happens from time to time), you and your buyer have two choices.

The first is, let him. This is often the wisest choice when the seller wants out because of a death, illness, or other tragedy. It’s just not worth it to pursue a seller who’s grieving or otherwise involved in some major life change, even if it means walking away from the deal and associated profits.

The other is, refuse to let him. By virtue of the signed purchase contract, you have the right to force the seller to honor his side of the contract.

When the seller just “decides” not to fulfill his contract—often because he just doesn’t want to, or decides that the money isn’t enough, or whatever.

Usually the threat of a “specific performance” suit, where you sue the seller to force him to honor the contract, is enough to make a seller sit down at the table.

Just a note: remember that, once you’ve assigned your contract, it’s not really up to you to decide how to handle this situation any more—it’s up to your buyer. And if the buyer can’t or doesn’t want to try to force a reluctant seller to the closing table, you’ll need to refund any assignment fee that you collected.

What happens if I make a mistake in the value or cost of repairs of a property?

No real tragedy; everyone does this from time to time, especially when trying to estimate a repair you’ve never seen before. Assuming that you used an inspection or partner approval contingency, you’ll exercise it and get out of the contract. Or better yet, try renegotiating the price. But in either case, if you inform the seller before your contingency time runs out, you’ll be able to set things back to rights without even losing your deposit.

Learn all about the realities of the wholesaling process and how to do it RIGHT when Vena Jones-Cox presents at our March 13th MAREI meeting!

MAREI Meeting March 13 How to Earn $5,000 to $10,000 Wholesaling in the Next 30 Days!

With Vena Jones-Cox Register at www.MAREI.org WWW.MAREI.ORG

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PARALYSIS OF ANALYSIS Information Overload…

by Vena Jones-Cox

Q: I've recently started going to meetings of my local Property Owner's Association, and I think they're great. The problem is, there's SO much information that I don't know what to pay attention to! Every month, there's another speaker with another opinion on the "best" strategy for this or that.

I'm overwhelmed, and can't seem to get out and actually do anything.

Please recommend a course of study that will help a new investor make a nice, simple deal. ©A.G, St. Louis.

A: I'll go you one better than that; I'll tell you the ABSOLUTE BEST strategy for buying and selling property...or would that be less than helpful?

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New investors who attend real estate association meetings often come away with the same "paralysis of analysis" that you describe. There's SO MUCH information available, and so much of it appears to be contradictory (buy foreclosures...don't bother with foreclosures...buy to hold...buy and sell) that one wonders how anyone ever figures it all out. And adding to the problem, every successful investor is willing to defend to the death THEIR strategy as the BEST strategy. Although they're trying to be helpful, they often add to the confusion experienced by newbies trying to make sense of it all.

In my experience, new investors that don't start making offers in the first 23 months never get around to doing it at all. The fear of doing deals only

fades with the actual doing of deals; no amount of "book-larnin" will ever give you the confidence you want. So stop trying to learn everything, and focus on what you need to make the first offers. Those things are: 1) Some idea of what you want your real estate to do for you.

Know this, and you'll have a good idea of the exit strategy AND the type, condition, areas, and price range of properties you should be looking at. Want quick cash? You'll need to wholesale properties.

Looking at anything OTHER THAN 1-family junkers is a waste of time.

Eliminate other properties and from your thinking and move on.

2) A working knowledge of how WWW.MAREI.ORG

your ONE exit strategy works.

Building on the last example, once you know that wholesale deals are sold to cash buyers for 60%-70% of as-is value, you know a) how to calculate an offer and b) that you need to start finding buyers NOW. 3) Two or three strategies for finding the types of properties you want.

Whatever your chosen strategy, finding the good deals will consume most of your time and energy. So try 2-3 methods all at once for a few weeks. Discard those that fail and amplify those that work, but always use more than one way at a time.

4) The ability to evaluate the properties you're viewing.

In the case of junkers, you'll need to know how to find the after-

repaired value and the cost of the repairs. Don't worry about figuring out what the property will rent for; it's not important to your plan.

Conversely, if your plan is to buy and hold multis, you'll need to learn how to calculate the return on investment.

5) A team and a contract that will keep you out of trouble.

Why do you need to know how to do a title search when there are folks who do it for a living? Sure, it might be good to know later, but it isn't crucial for you to know right now.

And if you have a well-written purchase contract that allows you to get out of a bad deal before it closes and an experienced mentor that will help you through your first few deals, how can you lose.

Vena is the featured speaker at our March 13th MAREI Meeting and she is teaching a full day workshop for MAREI on March 24th.

Who is Vena Jones-Cox? A full time real estate investor in the Greater Cincinnati Area who bought her first rental property in 1989 and has worked over 700 deals (that's a guess). She wholesales a house on average every 9.125 days and keeps about 5 others every year.

She has been a president of many real estate investors groups - REIA of Greater Cincinattie, Ohio REIA, National REIA. She teaches real estate investors at the local REIA, speaking at other REIAS, through online workshops and on her radio show. Oh, and she is a licensed real estate broker in Ohio working only for herself.

And no she does not do all these deals and teach and run RIEAs all by herself, she has the help of a small team. Come meet Vena at MAREI to learn more.

How to Build a 6 Figure Wholesale Business & How to Generate Leads A Full Day Workshop with Vena Jones-Cox on March 24th!

Special Early Bird Price till March 18th $49 for Members & $79 for Non-Members Register Today at www.MAREI.org RE INVESTMENT NEWS • PAGE

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THE NOTE BUSINESS What is it and how to make money …

As real estate investors we pretty much understand what real estate is and what renting is, but many don’t quite understand what is meant by the Note Business.

What is a Note A Note is a promise to pay overtime by a borrower. The Note is going to include the amount that is owed or the principal, the time frame of the note and the interest to be paid.

If you were to seller finance a property and create a note, you would then be owed a stream of payments based on the amount owed, the time frame to pay the note and the interest owed. In this scenario the stream of payments would include the principal 14

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amount, the amount you financed, but also an interest payment every month.

Just like banks who finance houses, your note or Promissory Note for long would create and define the debt owed and it would further be secured by real estate through a Deed of Trust in Missouri or a Mortgage in Kansas. This Deed of Trust or Mortgage puts the public on notice that you are owed a debt secured ty a particular piece of property and defines what would happen if the borrower failed to pay that debt.

What is Discounting a Note To understand discounting a note let’s put some numbers in an example. Let’s say you seller financed a property and the borrower

signed a promissory note with the following terms: Principal is $100,000, Interest is 8% and a Time Frame is 30 years or 360 Payments.

The face value of this note is $100,000 and the holder or owner of the note is owed 360 payments that each include some amount of principal and some amount of interest based on an amortization schedule If a discount note investor were to buy this note, they would not pay the full face value of $100,000 but would rather want to buy it at a discount, so that instead of earning 8% interest over the 360 payments, they earn a higher rate of return. So rather than paying $100,000 for the note, the WWW.MAREI.ORG

discount note investor might pay $80,000 for that note, thus increasing the rate of return much higher than 8%.

Profiting Over the Long Term When we look at making a profit on a discounted note we need to add a few more numbers to our example. Let’s say we have a $100,0000 Note that earns 8% interest over 30 years or 360 payments If we plug these numbers into an amortization schedule, a software that tells us how much each monthly payment should be and how much of it is principal and how much is interest we find that the month payment should be $733.77.

If we take that monthly payment of $733.77 and multiply it by the 360 payments, we find that the owner of that note would receive $263,880 over the full life of the note.

So if you were the landlord and had $120,000 house that you rented out for $800 a month, you would get a little more in monthly rent payments over that same 30 year time frame, but out of that you would have to deduct taxes, insurance, maintenance and vacancy, that could quite possibly eat up ½ of your monthly rent payment leaving you earning maybe only $400 a month. Not to mention the head aches of managing tenants and toilets.

If you were to seller finance that same house and get $20,000 as a down payment and create a $100,000 note you would then earn the $263,880. And if you were to sell that note to a discounted note investor, you

would get $80,000 NOW, in this example, and the note investor would then earn the $263,880.

Quite often the Discounted Note Investor seeks out notes created by sellers who would much rather have their money now, the $80,000, rather than waiting 30 years to earn the full $263,880, and that is how the Discounted Note investor makes huge profits, by being willing to wait to earn his profit over time.

Risk in the Discounted Note Business If you take a look at our example we have been talking about, the balance of the note is $100,000 and it is secured by a house that is worth $120,000. If you were the investor who purchased this house at a discount, say $50,000 and put $20,000 in renovations, you have $70,000 in the house when you sell it, and end up with $20,000 down and a note for $100,000 that will pay you $263,880 in payments over 30 years. You are sitting quite well, with the possibility of getting all your payments or the $120,000 house back if the borrower stops making payments.

Now the Discounted Note Investor can step in and pay you a discounted price of $80,000 in this example. The Discounted Note Investor is stepping into a similar low risk scenario with only $80,000 invested and being owed the $263,880 that they will either get in payments or if the borrower does not pay, getting a $120,000 back through foreclosure.

And you the Investor who created the note? Well you earned the $20,000 and made an additional $10,000 when the Discounted Note Investor bought your note.

There are several ways to make money

with the note.

1. Buy the house, sell the house and create the note, with very low risk if you do your homework on the borrower and make sure they have the ability to pay.

2. Sell that note to a Discounted Note Investor to get your cash now and go on with other investments.

3. Buy that note as a Discounted Note Investor and collect your profits over time, here you want to do your homework not only on the borrower but also the note itself and the house securing the debt.

All three ways of investing are fairly low risk because there is still the security of the house that the owner of the note can get back if the borrower does not pay, Then the house can be resold for cash and / or a new note created.

Two Types of Notes in the Note Business In the above examples we were talking about a performing note, a note where the borrower is paying as agreed. When the borrower stops paying as agreed the note becomes a non-performing note.

There has always been performing and non-performing notes in the note industry that come from home owners who sold their homes seller financed or by banks funding the purchase of homes.

The Non-Performing Note Business With the mortgage crisis in 2008, 2009, 2010 the big banks learned something that has changed the RE INVESTMENT NEWS • PAGE

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way the industry deals with nonperforming notes. Pre 2008 if a borrower was in default either the bank foreclosed or possibly an investor or real estate agent would work real hard to negotiate a sale for less than what was owed, this is called a short sale.

During the mortgage crisis, due to the sheer number of loans in default, the big banks learned something. They learned it was less costly to sell that defaulted loan in a package with other defaulted loans at a fairly steep discount than it was to keep it in house and devote their own time money and effort to collecting the money or foreclosing and selling the house.

They started selling these large packages of non-performing notes to hedge fund investors, who would break these up into smaller packages and sell them to smaller hedge funds who eventually would sell them in ones and twos to the average discounted note investor.

Now you may ask, what would a discounted note investor want with a note that was not being paid?

First, there was the discount. By the time a Non-Performing note made it to the average discounted note investor they were able to purchase this note for about ½ the value of the home that was backing 16

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the loan.

Second, because the note was purchased at such a steep discount, the discount note investor could reach out to the borrower and modify the loan in all kinds of ways from lowering the principal balance, reducing the interest, to extending the time frame, all in an effort to get the borrower paying again.

Third, when the home owner could not or would not start paying the modified amounts or in some cases had already abandon the home, the discount note investor could often negotiate to get the borrower to give the house back to wipe out the debt or they could foreclose and acquire the house.

in the Note Business. In real estate investor terms you can create a note, or flip or wholesale performing notes and you can buy and rehab non-performing notes.

Article written based on a series of Videos from NoteSchool on YouTube.

If you would like to learn more about the Note Business and how you can use it in your current or future real estate business, join MAREI in May in welcoming Joe Varnadore from NoteSchool at the meeting on the 8th where he will explain how rules and regulations have changed the reale state market. He will show us the strategies that successful industries are suing to optimize their results by combining real estate investing with the note business.

Full Circle And this brings us full circle, the investor who forecloses or gets the home back from the borrowers non-payment, can now sell the house at a discount to other investors to make a profit. Or they can rent it out.

Or they can retail it out to an all cash or all financed buyer. Or they can create a new note, to earn profit now on the down payment, profit over time through monthly payments, and if the want their money now, they can sell that note to a discounted note investor.

There are just so many new profit avenues

- Gain the advantage by purchasing from a "hidden inventory" that no one else knows about.

- Use mortgage backed notes to acquire real estate for up to a 70% discount.

- Tripling your net income by "papering oout of the property.

- How to start in the note business with as little as $100 Watch the MAREI website for more details on this meeting.

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Build Your Team With MAREI Business Members Save time and money by starting with service providers who already know your business. Who can solve problems as they arise to help you get the deal completed on time and for maximum profit.

MAREI.org click on Business Associates

Attorney Anderson & Associates Evictions / Collections Julie Anderson www.MOKSLaw.com 816-931-2207 Auction Company Auction.com Rachel Bailey www.Auction.com 816-797-6875 Building Supplier KC Cabinet Collection Mark Yanda 913-980-4260 The Home Depot George Neal 816-461-9583 2% Rebate / 20% Off Paint Other Discounts Details in Member Benefits

Joe’s Carpet / Weber Flooring Jerry Ratway www.WeberFlooring.com 913-236-3680

NuLook Custom Finishes Cabinet Refinishing Carol Baldwin www.NuLookFinishes.net 913-385-2574

Contractor Candid Construction General Contractor Blake Brose www.CandidKC.com 816-368-1341 Hearth Masters Fireplace / Masonry Gene Padgitt www.ChimKC.com 816-461-3665 Genesis Home Restorations Mold Remediation Terry Amerine GenesisHomeRestorations.com 913-270-0812

KC Grout Works Tile Refinishing DJ Hoffman www.KCGroutWorks.com 816-448-5579 Serve Pro East Independence/ Blue Springs Crytsall Gregg www.ServeProEastIndependence BlueSprings.com 816-224-5300 Insurance Arcana Insurance Rental, Vacant, Landlord & More www.ArcanaInsurance.com 877.744.3660

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Self Directed IRA Equity Trust Company TrustETC.com/NationalREIA FREE Training 844-732-9404 Lending

Pat Live Answering Service Discounts www.MAREI.org/PatLive Zoom Video Conferencing www.MAREI.org/Zoom

Crossroads Investment Lending Hard Money Britton Asbell / Doug Harris www.KCLend.com 913-800-8226 House Traders Monthly Meeting

Office Supply

Investors Choice Funding Hard Money Scott Ficinus InvestorsChoiceFunding.com 816-668-7223

Pest Control

Merchants Mortgage Mushy Money Susan Aubin www.MerchantsMtg.com 303-514-0815

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REI Investor Funds Hard Money Charlie Fitzgerald www.REIInvestorFunds.com 913-904-8090 Marketing Build A Sign Signs & Banners Plus www.BuildASign.com Discount Link in Member Benefits Constant Contact Email & Social Media Marketing FREE Trial MAREI.org/ConstantContact Investor Carrot Investor Websites Free Training & Discounts www.MAREI.org/IC 18

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Office Depot / Office Max www.OfficeDepot.com Discount Link & Card in Member Benefits Package

BedBugTraps.com Stop BedBugs Discounts for Members

Bridge Management Turn Key Provider Nathan Brooks www.BridgeTurnkey.com 913-276-4114 McKinnis Real Estate Turn Key Provider Nick McKinnis McKinnisRealEstateInvestments.com 816-914-2614 B & C Investment Group Wholesale Allen Cuffey www.FlipNvest.com 816-867-8617 KCInvest Investment Properties Scott Tucker & Kim & Don Tucker www.KCInvest 913-735-0018

Pride Properties Wholesale Marcus Bray & Matt Bray www.PridePropertiesHomes.com 913-213-5370 Deal Makers Monthly Meeting Property Manager Home Rental Services Paul Branton www.Home4Rent.com 913-627-9543 MÂ & M Property Pros Michael & Michele Bellman www.MMPropertyPros.com 816-490-6745 Royal Gate Management Ryan Goyer RoyalGateManagement.com 913-735-7783 Realtor Realty Resource Listing Agent Scott Tucker www.RealtyResourceKC.com 816-284-7844 Rent Collection National Credit Systems Specializing in Collections www.NationalCreditSystems.com Screening Rent Perfect Tenant Screening Plus Heather Johnson www.RentPerfect.com 877-922-2547 Discounts at www.MAREI.org/RP

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Escrow Services Inc. Loan Servicing Nationwide www.EscrowServ.com Title Company

Rachel Bailey : Auction.com

RACHEL BAILEY AUCTION.COM Auction.com is focused exclusively on the sale of residential bank-owned properties online and foreclosure properties at the courthouse steps.

Properties are marketed online at Auction.com and you can bid on the bank foreclosures auctions on the courthouse steps and the bank owned properties right there on auctionc.om Rachel is our representative from Auction.com to answer your questions and to help you learn the ropes. She holds workshops from time to time that all potential buyers are encouraged to attend.

Look for Rachel and her friends in green shirts at the MAREI Meeting Find her on Facebook or call 816.797.6875.

Accurate Title Company Dave Green www.AccurateTitleCo.com 913-338-0100 Alpha Title Mary Kellogg www.AlphaTitleInc.com 913-498-8999 Trash Out 1-800-Got- Junk Trash Pick Up www.1800GotJunk.com Discounts in Member Benefits 1-800-JunkPro Trash Pick Up & Dumpsters Clint Pringle www.Junk.pro 816-935-7078 JunkLuggers Eco Friendly Junk Removal Olivia Jones www.JunkLuggers.com 816-905-2204

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To learn more and join, please go to MAREI.org/GrowMyBusiness

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