MAREI December 2022 Newsletter

One reason that 75% of MAREI members join is to stay informed of what is going on in the Kansas City Real Estate Market Be sure to follow us on social media to stay up to date on the latest issues and join the conversation Constructive comments are always welcomed, even when we are not all on the same page

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YOUR REIA GROUP

TOM ZEEB ON THE MASSIVE BENEFITS OF YOUR RIEA GROUP

A “Real Estate Investor Association” or REIA is a tremendous source of knowledge, networking and inspiration You need to make these meetings part of your monthly schedule

Every club operates a bit differently, but the basics are all the same. They are a great place to meet other people in the business. People who can educate you, sell you deals, buy deals from you and recommend team members and services. The other people there are the number one reason you should go to the meetings. Being around others in the business and learning about how and why they are successful will help you succeed in your business faster

While at a meeting, don’t be shy. Shake hands with the people around you and give everyone you meet your business card (you do have cards on you at all times, don’t do?) Be sure to get their card as well. If they do not have one, have them write their name, phone number and email address down. You will want all this information to build your database. These are the people who will buy your wholesale deals or the people that you can call when you are putting a deal together.

If you are the shy type, try to make a game out of it. Set a goal and tell yourself you want to leave the meeting with no less than three people’s cards Then force yourself

to say hello to the person sitting next to you. It will get easier every time

The conversations will be basic and remind you of your freshman year in college, when everyone asks the same old questions like ‘where are you from?’ and ‘what are you

Tom Zeeb sharing his knowledge at MAREI in 2017. Tom will be joining us again in January for the monthly meeting and an all day workshop on Saturday January 14th

studying?’, but now it will be ‘what kind of investing do you do?’ and ‘how long have you been doing it?’

Want to learn how to estimate repair costs? Ask one of the renovators at the meeting if you can go see one of their projects and have them explain how they determined their costs. Offer to take them to lunch in return and tell them you’ll be happy to wholesale deals to them Be respectful of their time though, they are busy and aren’t getting anything in return from you at the moment (other than lunch). Be sure to know the basics, you don’t want to waste their time on things that you should have already learned from books, you’ll get more out of it too!

Want to find a good attorney or accountant, ask the regulars at the meeting who they use. What better place to get good team member recommendations that from people actually in the business?

Some groups have a ‘deal makers’ section, where they let people stand up and announce deals. Others have a ‘success stories’ section where anyone who has done a deal in the past month can stand up and give the details and then be applauded. Pay attention to who stands up during these sections month after month They are the players in your local market and people you should make an effort to know.

The clubs are not usually free and there is a charge per meeting or on an annual basis. I highly recommend becoming a member. The $200 you spend will be well worth it Where else can you get all these benefits in one place? It is a totally deductible expense as well

course. The speakers vary widely but we find that we always get a few great ideas from each one and it is well worth listening to them If you resent being sold to, get over it They are there to make money and they have given you free advice and inspiration in return for being able to pitch you. There is nothing wrong with that. Especially if you walk away with a great idea

We will often buy their courses if we think it will give us great ideas that we can apply in our own business. Most of the courses that we’ve bought we’ve made the money back many times over from the great ideas that the courses taught us

Buying courses is fine as long as you plan to read them and put the ideas into action. Don’t fall into ‘analysis paralysis’. You won’t make your money back by letting it sit on the shelf unread and unused.

Some of the associations have websites packed with great information. Some have on-line bulletin boards as well. This is another great source for info or for advertising deals. Some of the websites are for members only.

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Most meetings will also have a speaker, usually a national speaker These are gurus who come to town to teach you about their particular real estate investing specialty and to offer you their home study

FIND THE DEAL, MAKE THE DEAL, GET PAID 14 JAN 2022

ONE DAY ONLY

Learn the Five Essential Elements That Every Investor Needs for a Successful Real Estate Business

Marketing for Consistent Lead Flow How to Determine Value Learn the Numbers of a Deal How to Talk to Sellers Use the Right Contracts

AN TOM ZEEB WORKSHOP

After nearly drowning on a vacation he put on credit cards and after reading one book, Tom Zeeb jumped into real estate with a 6 unit apartment building and it was a flop. After actually learning something about investing, and discovering wholesaling, his business took off He has perfected his processes over the years and will be sharing them at this workshop

Super Early Bird Price through December 31st Members $29 and Non-Members $49

Plus add a family member or business partner for $10. Price increases at 12:01 AM www.MAREI.org/JanuaryMeeting

Short Term Rentals

D O N ' T G E T B L I N D S I D E D B Y T H E L A W

Short-Term Rentals. Airbnb. We have been learning for several years about how much more profitable these can be over a regular rental Sure they take a bit more work, more in renovation, and they need to be furnished But man oh man, they throw off a much, much better cash flow

Except we have an affordable housing crisis across the country and short-term rentals are taking much-needed housing inventory out of the rental pool Except that the neighbors don’t like them and want them stopped.

Some Cities are Taking Stock

There are cities across the country that acted early to create licensing, special taxes, and rules and regulations around short-term rentals. Some didn’t. Some that acted early did a great job, while others made it way too hard to follow the rules or to even enforce them

and they are missing out. LIke Kansas City Missouri.

Other cities have done nothing. Yet. Like Overland Park Kansas.

Overland Park Kansas and Short Term Rentals

In April 2022, the Overland Park City Council directed City staff to research and analyze options to address issues surrounding short-term rental uses of residential properties According to Nikki Lansford in the Shawnee Mission Post, the “city-led analysis in Overland Park concludes that problems associated with short-term home rentals are less common than some may believe.”

Yet the Overland Park City Council is continuing to explore options for regulating or possibly completely banning these types of rentals within

city limits in the future. Suggested changes include

A nuisance party ordinance for all properties

Requiring Short-Term Rentals to be Licensed Stronger regulations for short-term rentals

Banning them entirely

The Overland Park City Council has decided to do a bit more homework First, a study to determine exactly how many short-term rentals exist within the city. Then research what other area cities are doing. And come up with a plan in 2023 to address the issues.

Currently, they believe that Overland Park has 102 Short Term Rentals with only 63 of them being in a single-family homes. The single-family short term rentals generate more police calls compared to owner-occupied house

A brief search of Airbnb for 1 week in december in the Kansas City Metro area

, yet account for less than one-half of one percent of all calls received by the police department city-wide Short Term Rentals also generate more noise complaints than owner-occupied homes, but in the 2 ½ year period the council analyzed there were a total of 9 noise complaints

Kansas City Missouri and Short-Term Rentals

The Northeast News reports that on November 6th the Kansas City Neighborhood Advisory Council a partnership between UMKC and its surrounding neighborhoods sent a formal recommendation to Mayor Quinton Lucas, City Manager Brian Platt, and Council Members. The recommendation was to place a moratorium on all new applications for non-owner-occupied short-term rentals. This was to give the city time to have a constructive conversation on updating regulations

“The clamor over short-term rentals has been building for some time with industry growth shadowed by reports of nightmarish stays, property damage, and housing market disruption,” the letter reads “Cities across the country have been updating legislation, business practices, and zoning and building codes in an effort to manage an expansive marketplace that is projected to exceed 1.2 million domestic listings in 2022 and reach nearly 1.4 million listings in 2023.”

The goal was an audit by the city to analyze the data and to shut down unregistered short-term rentals that are not currently being regulated.

Kansas City Missouri’s Audit

MAREI reported that the city audit had several findings

First presented on November 29th, the audit found that there are laws on the

books that prevent the city from treating short-term rentals as hotels. This prevents the city from collecting special hotel taxes and occupancy fees from short-term rentals as they do for hotels This is costing the city about $2 5 million every year The recommendation was to make it a priority to get state law changed so the city can collect

Then on December 9th the city auditor presented that out of 1,800 short-term rental properties listed on various platforms in Kansas City Missouri, only 11% of them have the permits as required. The city’s short-term rental program, which has been around since 2018 is ineffective. The city needs to work with the industry to make the permitting process more streamlined and make it easier to enforce.

In the Community

Tyler Shirk a local short-term rental manager with Brown Bear shared on Facebook that “We’ve seen this coming for months I continue to implore you to get your Kansas City properties Short Term Rental Permits ASAP The city is steadily moving forward

At the end of the day, this will be great for you if you have a short-term rental There will be too many homes that can’t get permitted because they’ve been improperly managed, allowed parties, not followed the rules, and become a nuisance to their neighborhoods. This will diminish the amount of STRs in the market and remove much of the competition for your units! . . .

The shoe is dropping and it’s time to reap the rewards of being ethical and legal

GET YOUR UNITS PERMITTED ASAP!?

What Should Short-Term Rental Owners Do

First: Make sure you seek out the local rules and regulations in the cities, counties, and states where you own short-term rentals Make sure you are in compliance

Second: If you need to have a permit or license make sure you take steps immediately to get this in place Many places create laws where there were none or change current law grandfather in those with permits. If you don’t have your license when that happens, you may never get one.

Third: Make sure you stay up to date on the regulations in your cities. Join the local REIA Group, and look for shortterm rental groups on Facebook and Meetup to participate in. Retain the services of a quality manager. Read emails, newsletters, and social posts Don’t get the information after the fact

Fourth: When there is a city council meeting – attend it and learn things Make connections with city leaders and share informed and vital information When the time comes: send emails, make phone calls, and testify at meetings Don’t ignore it

Fifth: Start looking for alternatives now, just in case you have to pivot.

Here in Kansas City

Make sure you are signed up for emails from MAREI to stay informed in the Kansas City Metro Area and if you learn of an issue in the area please alert us so we can share with those who are focusing their time and efforts on the short term rental industry

Housing providers need to make sure that they or their property manager has taken steps to

in place

their renters to request repairs Having a formal process that includes trackable documentation and time and date stamps is a must

Rental Maintenance

MAKE SURE YOU HAVE A FORMAL REPAIR REQUEST PROCESS

The Missouri Landlord Tenant Law Guide outlines the Rights and Responsibilities of Landlords and Tenants when they enter into contract with each other through a lease

General Obligations

Landlord-tenant disputes are a common occurrence in the renting process Some of these disputes could be avoided if landlords and tenants were aware of their rights and responsibilities.

Tenants should:

Pay rent on time.

Use reasonable care and not damage property.

Properly dispose of garbage. Refrain from taking on additional occupants or subleasing without the landlord’s written permission

Landlords should:

Make property habitable before tenants move in. Make and pay for repairs due to ordinary wear and tear Refrain from turning off a tenant’s water, electricity or gas -Provide written notice to tenants when ownership of the property is transferred to a new landlord Not unlawfully discriminate

When it comes to repairs and maintenance the ordinance states:

The landlord should be responsible for repairs caused by ordinary wear and tear and natural forces such as the weather. Tenants should pay for damages resulting from theirown negligence or the negligence of a guest.

If repairs are needed, ask the landlord to make repairs within a reasonable period of time If repairs are not made,

make a written request for the necessary repairs and keep a copy of the letter

If the repairs still are not made, the tenant may seek legal assistance If the dwelling becomes unsafe due to the repair problems, the tenant should contact local health or housing authorities

If a tenant withholds rent payments until repairs are completed, the renter may be in violation of the lease and may be subject to eviction.

In most circumstances, a tenant has no right to withhold rent. Missouri law provides only a very narrow exception to this rule for dangerous or unsanitary conditions that a landlord fails to fix.

If you have not read the Missouri Landlord Tenant Law, you should download a copy today and review it

put processes

for

Healthy Homes Rental Inspection Program

In 2018, the city and voters implemented the Healthy Homes Rental Inspection Program and opted to replace their current rental licensing program This ordinance allows for any rental home in the city to be inspected by the city Health Department upon complaint by the tenant, anyone who might like to lodge a complaint or at the discretion of the Health Department Since established, KCUR reports that 6,000 inspection have been made finding 17,479 health and safety violations.

Tenants Bill of Rights

In 2019, the city passed their Tenant’s Bill of Rights to among other things make sure rental housing has functional heating, sewage, hot water, plumbing, electrical and that all appliances provided remain functional Between state law that requires the landlord to maintain the home and these two new laws passed, the Health Department now has new tools on top of existing city codes to force the housing provider to fix a violation

Landlord Repair Request Process

Housing providers should have a formal, trackable process for their residents to request repairs. They should require renters to take photos and document the problem and submit them via an app or email to the housing provider.

This way the housing provide knows what is wrong and by using an app or email have a time stamp on those records

Next the housing provider should have a formal and trackable process for hiring and dispatching a repair person to address the problem, again through

a similar app or email process so the repair person can document and photograph repairs made

Having a formal process in place can help ensure repairs get made and don’t slip through the cracks And if there is a dispute down the road, there is documented proof of what took place

Please don’t rely on phone calls and text from renters or from repair people as it is very hard to enter a phone call or text into evidence in a court proceeding

Renters Repair Request Process

Renters in Kansas City can start the process of getting a Health Inspection by first documenting the problem in writing and with photos and presenting to their landlord. If the landlord does

not respond in a reasonable amount of time, then reach out to Health Homes and Request an Inspection Just keep in mind that if the repairs needed are the renters responsibility, that the inspector will require the Renter to resolve the issue, not the landlord

Renters in Kansas City or those who have a health or safety concern about a rental home can file a complaint by calling 816-513-6464

The Health Department will then conduct an inspection and work with your housing provider to get them to make the necessary repairs required of the landlord.

Accounting

Coleman Accounting Service

Bob Coleman ColemanAcctg com 913-787-0308

Attorney Anderson & Associates

Julie Anderson & Jamie Walker MOKSLaw.com 816-931-2207 See site for Free Forms

Attorney Spence Stover StoverLawFirm.com (816)778-2992

Building Supplier

DeMayo Enterprises

Wholesale Cabinets Mark Yanda www.DeMayoEnterprises.net 913-980-4260

Earthwise of KC Windows & Doors James White EarthwiseKC com 913-777-4862

Home Depot

2% Rebate for Members 20% off Paint www.HomeDeopt.com

Contractor

Hearth Masters

Fireplace / Masonry Gene Padgitt ChimKC com 816-461-3665

Olson Foundation Repair Foundations

OlsonFoundationRepair.com/ (913) 592.3300

Home Buyer kcmoHomeBuyer.com Kim, Don, & Scott Tucker 816-408-3600

Inspections

Triton Property Consulting Michael Coppoc MikeandZachInspectors com 816-491-3483

Insurance

Agema Insurance

Fred Dickinson www AgemaIns com 913-543-8116

Arcana Insurance Insurance for Investors NREIA.ArcanaInsurance HUB.com 877.744.3660

Rauber Insurance Agency

Farmers Insurance LoveIsOurPolicy com (816) 436-1016

IRA - Self Directed

CNB Custody Jenny Heiman www.CNBCustody.com 800-680-0340

Equity Trust Company TrustETC.com/NationalREIA 844-732-9404 Mainstar Trust www.MainstarTrust.com Jordan Scafe 1-800-521-9897

Quest Trust Company Kurt Power QuestTrustCompany.com 281-492-3434 x 3644

Lending

Crossroads Investment Lending Hard Money Britton Asbell KCLend.com 913-295-8083

Finish Line Funding

Short Term Funding

Bruce Belanger

FinishLineFunds com 913-346-8090

Flat Branch Home Loans Mortgage Banker Beth Langston FlatBranchHomeLoans.com 816-679-4000

JM Real Estate Capital

Andy Kozycz www.JMRECapital.com 727-390-7560

RollerMortgageTeamLeaderOne Alice Lund www.RollerMortgage.com 913 488 1769

Newieco Private Money Jeff Newhard (816) 721-9869

Merchants Mortgage Mushy Money Susan Aubin

MerchantsMtg com 9Bernie Richtor NorthOakInvestment.com 816-249-1001

Marketing

Carrot Websites & Online Marketing www.MAREI.org/InvestorCarrot

PropStream

Build Marketing Lists & Research properties www.MAREI.org/PropStream

Office Supply

Office Depot / Office Max ODP Solutions www.OfficeDepot.com Discount Link & Card in Member Discounts

Property Manager

Brown Bear KC Real Estate Services Tyler Shirk BrownBearKC.com 816-465-1252

Evernest Christina Erickson-Hoffman Evernest co 816-806-1100

Home Rental Services Paul Branton www.Home4Rent.com 913-627-9543

M & M Property Pros Michael & Michele Belman www MMPropertyPros com 816-490-6745

PMI Destination Properties

Ryan Kernicky www PMIDestination com 913-583-1515

Realtor Crown Realty Rich Melton RichMelton.CrownRealty.com 913-215-9004

Realty Resource Scott Tucker RealtyResourceKC.com 916-406-0701 Screening Rent Perfect Tenant Screening Plus www RentPerfect com 877-922-2547 Discounts www.MAREI.org/RP

Title Company

Accurate Title Company Dave Green AccurateTitleCo com 913-338-0100

Advantage Title LLC www.AdvantageTitleLLC.com Bud Whisler 816-279-8484

Rick Davis Title Rick Davis RickDavisTitle com (913) 374-7254