MAY2018
RE N E W S
INVESTMENT
NEWSLETTER OF MID-AMERICA ASSOCIATION OF REAL ESTATE INVESTORS
THIS ISSUE MAREI Member Benefit Home Depot Fix & Flip Is Dead - How to Profit at Least 30% More Record Keeping - for the Real Estate Investor Fresh Flooring Trends
REAL ESTATE NEWS
JOE VARNADORE NOTE INVESTING
WHY EVERY INVESTOR MUST LEARN THE NOTE BUSINESS MAY 8TH MAREI MEETING MAREI.ORG
Healthy Homes KC HUD Proposed Changes Smoke Detector Inspections KCPT Forum on Evictions $1.6 Million for Bed Bugs Service Dog Bills in Missouri Risky Loans - Dejavu? Single Family Rentals HOT KCRAR's March 2018 Stats
MAREI.ORG/CALENDAR
THE CALENDAR MAY MEETING BLOW AWAY THE COMPETITION WITH NOTES When you learn how to buy, sell, and create notes, you can create really cool deals that your competitors can’t. By adding note investing to your tool box you can increase profits by getting better deals, squeezing more profits out of the deals you have and well a lot of other things that the average investor just does not know how to do. Our guest speaker in May is Joe Varnadore from NoteSchool on why you need to learn notes. Tuesday May 8th. Monthly meetings 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. Presentation starts at 7pm.
WINVESTORS
SELLER FINANCE YOUR WAY See full day TO MORE PROFITS workshop
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.
The WinVestors meeting hosted by Brian & Michelle Winberry is everypage Wednesday 5 morning at 9 am at Lucky Brewgrill on Johnson Drive. On Wednesday, May 9th, Joe Varnadore will be making a special guest appearance to discuss using Seller Financing to make more deals and make those deals more profitable. No charge or registration fee. Must buy breakfast. Cost about $13 to $15 with tip.
MAY WORKSHOP
NOTE INVESTING 101 WITH JOE VARNADORE Note Investing is one of the hottest strategies of the decade—and for good reason. Performing notes are one of the best ways to get, passive, consistent “mailbox money” with double-digit returns. Defaulted notes are a great “back door” to buy properties other investors don’t have any idea how to find. Combine several note strategies and get rid of the tenants and toilets for even better returns. Join Joe Varnadore for a 1 day deep dive into how Note Investing Works and mark your calendar for the 3 day follow up BootCamp an Notes June 1, 2 & 3rd. Register at www.MAREI.org.
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real estate news HEALTHY HOMES KC Healthy Homes KC gathered enough valid signatures to compel the Kansas City Missouri City Council to put a Health Homes Ordinance on the Ballot for Voters to Decide. The ordinance would require a permit for all rental properties from the Health Department, sort of like they do for restaurants. It would also allow the Health Department to conduct interior inspections upon complaint and to require the landlord to make repairs. For Landlords who refuse to make repairs, there will be fines and suspension of licenses and prosecution. Will be on the August Ballot Learn More: MAREI.org/HealthHomesKC
HUD PROPOSED CHANGES In a recent release, the U.S. Department of Housing and Urban Development Secretary Ben Carson unveiled a package of reforms designed to offer Public Housing Authorities (PHAs), property owners and HUD-assisted families a simpler, less invasive
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and more transparent set of rent structures, and places HUD’s rental assistance programs on a more fiscally sustainable path. HUD is proposing a simplified structure of ‘core rents’ that offers a more transparent and predictable rent calculation that streamlines program administration for Public Housing Authorities and owners and is easier for both landlords and tenants to understand. Under this core rent proposal, PHAs and owners would only be required to verify income every three years rather than annually. This would substantially ease the administrative burden on PHAs, owners, and residents and would effectively encourage increased earned income without adversely impacting a household’s rent for up to three years. HUD will also create a menu of ‘choice rents’ that PHAs and owners may implement to promote greater flexibility, local control, and self-sufficiency for non-elderly/non-disabled households. Read the full press release and proposals from HUD at MAREI.org/HUDProposal
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SMOKE DETECTOR INSPECTIONS A word of warning on Smoke Detectors. Have an inspection program to periodically check the smoke detectors in all your rental units and at the same time, make sure all your residents sign off on a form documenting that they are working and warning of steps you will take if it is found that they have disabled a smoke detector. The main reason for this is that you don't want your residents being harmed in a fire in their own home and you don't want anyone else being harmed should the fire spread. Here's a better incentive, in 2016 a landlord had a fire in a unit and that fire killed 3 people. About 9 months before the fire, city officials inspected and cited the landlord for failing to properly maintain the exterior of the home. The fire was caused by faulty wiring and they still do not know if the smoke detectors were working or not. The family of those killed sued, stating that the landlord had failed to provide working smoke detectors. The family won a 5 million default judgment plus interest for failing to pay up. This might all have been avoided if the landlord had provided working smoke detectors and documented that they were working.
KCPT FORUM ON EVICTIONS Kansas City Public Television is hosting a forum on evictions on Wednesday, June 27th at 6 pm at the Kansas City Public Library Plaza Branch located at 4801 Main St, Kansas City, MO 64112. One of the Panelists is Eviction Attorney and Landlord Advocate Robert Wise. Bob has asked our members and other concerned citizens to attend this event and show your support for our industry. It seems the last event, the real estate investor, and the property owner was underrepresented.
The event starts at 6 pm with Wine and Cheese and Forum starts at 6:30. Watch MAREI.org Calendar for more details. .
$1.6 MILLION FOR BED BUGS A jury has awarded a California family $1.6 million in one of the largest single bed bug case awards ever reported against an apartment owner, according to a release. Liliana Martinez told NBC in Los Angles her family suffered for months with bed bugs at the Kahala Islander Apartments in Inglewood, California in 2010. She said her daughter, a baby at the time, was covered in bites. Her son, then 3 years old, was covered in bites and always scratching. The apartment owners mismanaged the cleanup and cost the family their belongings. The attorneys for the family hope this tells owners to be proactive and learn how to fight bedbugs correctly.
SERVICE DOG BILLS IN MISSOURI NEED HELP Missouri Representative Chrissy Sommer from St Charles County introduced two bills this year to help our industry with Service Dogs. The first is HB 1369 defines what constitutes a service dog, which ties in with the next bill. The second is HB 2031 which would make it a class B misdemeanor which would include up to 6 months in jail and or a $1000 fine for misrepresenting a dog as a service dog and includes language about service animals. Both Bills have passed the house, she needs them heard in the Senate and is asking us to all reach out to Senator Ron Richard, President Pro Tem of the Senate, and ask him to hear both bills on the Senate Floor so we can get them passed. His office phone is (573) 751-2173 and email per his website is ronrichard300@att.net. His website is www.RonRichard.com.. RE INVESTMENT NEWS
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RISKY LOANS - DEJAVU? With rising mortgage rates and rising prices making it harder for people to buy houses, Fannie Mae and Freddie Mac are looking ways to ease credit standards so more people can own a home. Some examples include backing loans made by lenders who pay down a buyer's student loan debt or that east the standards for self-employed borrowers. And more and more they are backing loans where the borrower has a debt to income ratios of up to 50 percent. This new policy at Fannie Mae has added 100,000 new mortgages they would not normally have made. The housing analysts say that the lenders need to be very careful as this is what got us into trouble last time. While the percentage of borrowers with debt to income levels close to 50% is still well below the peak of 37 percent we saw in 2007, we are nearing the levels seen in 2004 and 2005. What may help, however, is that today's borrowers tend to have a better credit history and higher credit scores. Source Rising Home Prices Push Borrowers Deeper into Debt in the Wall Street Journal.
SINGELE FAMILY RENTALS A recent RentCafe report tells us that the hottest rentals around at the national level is not the fancy apartment, but rather the single-family home. The number of house rentals jumped 31% from 2006 to 2017, according to a recent RENTCafé report. Meanwhile, apartment building rentals grew only 14% over the same decade.
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KCRAR'S MARCH 2018 HOUSING REPORT New residential real estate activity has been relatively slow in the first quarter of 2018, yet housing is proving its resiliency in a consistently improving economy. Some markets have had increases in signed contracts, but the vast majority of the nation continues to experience fewer closed sales and lower inventory compared to last year at this time. Despite there being fewer homes for sale, buyer demand has remained strong enough to keep prices on the rise, which should continue for the foreseeable future. Closed Sales decreased 7.4 percent for existing homes but increased 12.6 percent for new homes. Pending Sales increased 3.4 percent for existing homes but decreased 2.0 percent for new homes. Inventory decreased 24.5 percent for existing homes but increased 4.2 percent for new homes. The Median Sales Price was up 10.1 percent to $185,000 for existing homes and 2.3 percent to $332,975 for new homes. Days on Market decreased 12.5 percent for existing homes but increased 3.8 percent for new homes. Supply decreased 25.0 percent for existing homes and 3.6 percent for new homes. The Federal Reserve raised its key short-term interest rate by .25 percent in March, citing concerns about inflation. It is the sixth rate increase by the Fed since December 2015, and at least two more rate increases are expected this year. Borrowing money will be more expensive, particularly for home equity loans, credit cards and From Kansas City Regional Association of Realtors. Get the full report at kcrar.com/Statistics
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HOME DEPOT DISCOUNTS MEMBER BENEFIT
The biggest benefit that MAREI member's see to their bottom line is the discounts offered to our members exclusively by MAREI being a Chapter Member of National REIA. The largest discount is their 2% Rebate program that refunds 2% of all dollars spent at The Home Depot. In the last 1/2 of 2017 MAREI Members Spent $6,490,979.42 at the Home Depot between July 1 and December 31st, 2017. Doing the math, they paid out in checks and gift cards 2 percent of that total to MAREI members to the tune of $129,819.59. The average rebate paid out to MAREI members was down this time at $283.45, but as a whole we spent almost 3 Million less than the last 1/2 of 2016 and there were quite a few more people actually using the rebate. Out of the 550 or so members we had the last half of 2017, 458 of you spent money at the Home Depot. 08
Note that for every dollar our members spend at the Home Depot, the registered member receives a 2% rebate and National REIA receives a rebate as well that is in turn used to help pay for advocacy efforts on behalf of the real estate investment industry.
CABINETS: The Home Depot has also partnered with Hampton Bay Cabinets to offer members a one time 15% Discount Coupon on Hampton Bay Cabinets. Combine this with their standard Bid Room Pricing and 2% Rebate to save more.
If you did not receive a rebate, you may not have been set up. Members can log into MAREIMember.com and download the Memer Benefit Guide for full details on how to get their 2% Rebate and to access their other discounts.
To learn more about the coupon go to MAREI.org/Hampton and to learn more about Volume Discount Pricing to go MAREI.org/Bid
Other Home Depot Savings PAINT: Home Depot offers all our members a 20% discount on paint at check out. To receive your discount you must have a pro-rewards account and it must be set up for the National REIA 2% Rebate program. Once you are set up, you provide the phone number associated with your Pro-Rewards account to receive 20% off.
APPLIANCES: Home Depot has also put together several top appliance packages that real estate investors use in rentals and rehabs on a regular basis. They have special pricing on these packages. If you want to find out more ways Home Depot can help you, be sure to go to HomeDepot.com/Pro and also reach out to George Neal at our monthly meetings or call (816) 4619583 RE INVESTMENT NEWS • PAGE
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Video Conferencing That Always Works - No Matter What... We get it. Your time is important and your online meetings need to work all of the time, every time. And it needs to be simple. With Zoom, you get a great video meeting experience from your desktop, mobile device and conference room. Wainhouse Research gave Zoom a thorough examination and said, "Mostly we like the fact that Zoom calls always work - no matter what. From the office. From home. From the hotel. From the airport. From the coffee shop. Despite our best efforts, it was hard to break Zoom... While nothing is perfect, Zoom is not that far off." #1 in Customer Satisfaction MAREI recently switched to Zoom from a competitor. We have found it to be very similar in function, easier to use and way more affordable. We invite you to check out Zoom - visit MAREI.org/Zoom
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THE OLD FIX & FLIP IS DEAD
AN UPDATED STRATEGY TO MAKE
30% MORE ON THE SAME OLD DEAL
TURN 'OK' DEALS INTO PROFIT GEYSERS AND ONE-TIME PAYOUTS INTO YEARS OF MONTHLY CASH FLOW! Speical Report From NoteSchool Here's the thing about traditional fix & flips . . . • Finding deals with enough meat on the bone is getting harder - and will soon become like finding a needle in a haystack. • You’re going to be busier than a 1 armed paper-hanger if you want traditional fix & flips to fuel the lifestyle you're looking for. • Traditional fix & flips work like gangbusters on "reality television” but in real life? Not so much . . . In his book 7 Habits of Highly Effective People, Stephen Covey, writes at length about climbing the ladder of success . . . And he cautions that if you’re going to do the work to climb the ladder - at least make sure it's on the right wall. Solid advice. Nothing's worse than getting to the top of the ladder only to realize that you 08
didn't get where you really wanted to go. Using those terms, what I am telling you is that if you're primarily doing regular fix & flip real estate - your ladder may be on the wrong wall.
Not so fast . . . Don't forget the "fix” side of the fix & flip . . Average rehab costs run 20%-33% of the after repaired value according to RealtyTrac.
If your goal is to build wealth, cash flow, and enough time-freedom to do the things you want to do then regular fix & flips will not get you there . . .not anymore . . . that ship has sailed. Here's why . . .
For sake of argument, let's cut it in the middle at 26.5%. So that same $150.000 home, on average, actually costs you $39,750 to fix up to the point where you can sell it. Now your profit is down to $26,250.
GREAT FIX & FLIPS ARE GETTING HARDER TO FIND! The trend is clear. . . It's getting harder to make a buck flipping houses - if you do it the way they've always been done. Right now - for flipping the old way - the highest return on investment is in homes that sell for between $100,00 and $200,000 after repairs! Middle class America for the most part. In that price range, the average gross return on investment is 44%. That sounds pretty good right? After all, 44% on $150,000 is a profit of $66,000!
Starting to look pretty grim. But we're not done yet . . . FIX & FLIP CARRYING COSTS ARE RISING DRAMATICALLY -AND ARE ONLY GOING TO GET WORSE. There are a few reasons that's true. First, interest rates are at the lowest they've ever been - so they've got only one way they can go - up. So assuming you need to borrow money to float the deal...that loan is soon going to cost you a lot more. How much more? RE INVESTMENT NEWS • PAGE
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Depends how high rates go. But there's a bigger reason it's costing more to carry a fix & flip and bring it to fruition...
What if you could change things - just slightly - and add at least an extra 30% on every flip?
private hedge fund companies. Giant Wall Street hedge funds. In fact, these hedge funds are sitting on 9 million real estate deals as we speak.
It's possible, as you'll soon see. At least 30%. The average flip is now taking a staggering 179 days to complete, up over 100 days from the year 2000. Assuming your cash is tied up and you can't fund the flip without borrowing, that's 6 full months of loan payments . . . taxes . . ..heat and hydro payments... So chop another $10,000 off the total profit and you're down to $16,500. On a $150,000 home, flippers are averaging around $16,500 profit - for 6 months of work! And that's without real estate agent fees, lawyers, brokers, and the rest. After all that hard work, there's virtually nothing left! Hang on now...what about flipping cheap houses? According to RealtyTrac, houses under $50,000 actually returned on average negative 12%! Flippers lose 12% on these cheap deals. And that's before considering rehab and carrying costs. In other words, you might lose $10,000 to $20,000 on a $50,000 house.
9 million! I can show you how to sell properties in your market for 30% higher than you're able to today - with the exact same amount of work done. By itself, that should get your blood flowing . . . .30% is a lot of money. But what if I told you that you could buy properties 30% cheaper too? Now we're talking. Here's why that's possible. . . THE BEST DEALS HAVE GONE UNDERGROUND. BUT YOU CAN STILL GET THEM IF YOU KNOW WHERE TO LOOK: Used to be, some of the best deals were bankowned real estate - REOs They were a steady supply of houses to rehab and flip for a decent profit. But have you noticed that getting an REO from a bank these days is like pulling teeth? If you've been around awhile, you'll have noticed a massive change in inventory . . .
So you can stop wondering where all the deals have gone. . .Wall Street has them. But the good news is, Wall Street bought them in bulk . . . so they got them cheap as low as 10 to 20 cents on the dollar. And even though the hedge funds are middlemen - if you know how - you can buy these deals directly from them . . .and get them cheaper than you ever could from the bank in the first place. That's how it's possible to buy 30% cheaper than you are today. In a perfect world, you'll buy houses for 30% less than you are today, and sell them for 30% more than you are today. And although the OLD way of fixing and flipping is dead. . . .the NEW way is very much alive and well. I call it . . .
What about flipping expensive houses? Houses between $750,000 and $1 million only returned gross profits of 18% - and with average rehab costs run-ning 20%-33%, it doesn't take a genius to see that you're losing money there too. Here's the bottom line . . . If you're just getting started, this math should shock you. Fix & flips work much better on television than they do in real life. Maybe A&E knows this, and that's why they cancelled Flip This house in 2009? Now if you're a master flipper, you might be able to buy better, rehab cheaper and quicker, and make more money . . . I get that. But it's still a ton of work - for a lot less than you could be making.
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As you can see, in this Harvard report foreclosures are less than half of what they were in 2010. But even that's misleading . . .It's not that people aren't getting behind on their payments anymore. And it's not like people aren't losing their homes anymore. unfortunately, that hasn't changed . . . What's different today is how the banks are handling homeowners that are getting behind. More and more, the banks are selling pools of these delinquent mortgages to
FIX, FINANCE & FLIP Now don't let the "finance” part scare you. This is something you can do without any of your own money. But this extra little twist will allow you to make 30%-60% on your flips, immediately. Imagine what 30%-60% more profit on every deal would mean to your flipping business . . . • Finding deals with enough meat on the bone is getting harder - and will soon WWW.MAREI.ORG
become like finding a needle in a haystack. • You're going to be busier than a 1 -armed paper-hanger if you want traditional fix & flips to fuel the lifestyle you're looking for. • Traditional fix & flips work like gangbusters on "reality television” but in real life? Not so much Fix, finance and flip is a real game-changer. And I can almost guarantee you nobody else in your market is doing this. The field is wide open for you to get started. And that's exactly why I'm writing this article today . . .My name is Eddie Speed and I'm a fix, finance and flip pioneer. Let me be clear... This is not some new-fangled, unproven and untested theory - as you'll soon see. I've been doing this successfully for over 30 years. So successfully in fact, that I own my own private hedge fund company. I'm not some flash-in-the-pan. And while I've been doing this for 30 years, I've never been so excited as I am about fix, finance, and flip as I am right now - today! There's never been a better time in history for this. Thanks to technology and widespread banking changes, it's now easy to make at least 30% more on your flips double that if you buy how I do. I do it every day. And I'd like to tell you exactly how you can do it too . . . but I can't be everywhere at once, so I have built a great team of trainers that show you how all of this works in my training company NoteSchool, and one of my team, Joe Varnadore will be teaching at MAREI on May 12th, he will cover: • How to create multiple streams of passive cash flow that fuel your lifestyle all through retirement (I’m not talking about being a landlord…this true ‘set it and forget it’ income). • Why great REO deals are getting harder and harder to find (making it tougher and tougher to find good investments in your area).
• Why Wall Street has muscled in on your action (and how even the little guy can work with them to land incredible property deals). • A simple investing twist that takes you out of the ‘tenants and toilets’ game for good (and no, I’m not talking about hiring property managers). • Why right now is the absolute best time to get involved with real estatebacked notes (position yourself just in front of this profit tsunami and ride this wave for years to come). • How to start and grow a real estate empire using just $100 out of your selfdirected IRA(and grow that empire completely tax-free). • A completely innovative way to sell a home so that you enjoy cash flow payments for years – even though you actually got paid to buy the home (no – I’m not talking about lease-options or any other strategy you’ve likely heard of).
I really hope you can make the all day workshop on Saturday May 8th, it will be packed with information so you can make buy deals for a much lower price from the Hedge Funds. And how you can squeeze even more profits out of them with my Fix, Finance and Flip Model. For everyone who attends on the 12th there will be a special bonus Mind Map that helps you understand how the process of buying defaulted notes from the Hedge Funds works plus a CD that outlines the top 10 Mistakes the New Investor Makes. To attend on the 12th, be sure to go to www.MAREI.org and get registered. The early bird price is $59 for MAREI Members and $89 for Non-Members and you can add a spouse for $20. But you have to be registered by noon on Wednesday May 9th to get the early bird price, it goes up after that!
NOTE INVESTING 101 One of the best ways to get, passive, consistent “mailbox money” with double-digit returns. Defaulted notes are a great “back door” to buy properties other investors don’t have any idea how to find. Combine several note strategies and get rid of the tenants and toilets for even better returns Join MAREI as we host Joe Varnadore from NoteSchoolon Saturday, May 12th in Overland Park at the Holiday Inn. Lunch is included for FREE when you register by May 8th $99 for Members & $129 for Non-Members Early Bird Pricing Through May 9th at Noon! $59 for Members & $89 for Non-Members Special Pricing to add a family member or business partner $20 Early Bird. Register at MAREI.org
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RECORD KEEPING FOR THE REAL ESTATE PROFESSIONAL by Jeffrey S. Watson, Esq. A recent tax court case involving Alvin Jones, an insurance agency owner, highlights some of the many challenges faced by busy professionals who, for tax purposes, seek to become real estate professionals. Mr. Jones owned and managed ten single-family homes in 2011 and eleven single-family homes in 2012. He spent a considerable amount of time complying with requirements for Section 8 housing to keep these properties full and cash-flowing. After an audit by the IRS, Mr. Jones’s deduction as a real estate professional was disallowed because he was deemed not to be a real estate professional. A very important requirement to qualify as a real estate professional is the ability to prove that the majority of your work time is spent on real estate, not on any other activity. In the case of Mr. Jones, the IRS compared his records for what he did regarding his real estate business with his records for his insurance agency. 12
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They were able to use his own recordkeeping against him. His insurance agency business had several on staff with sufficient payroll and a lot of revenue. Mr. Jones had also documented substantial mileage driven in both tax years relative to his insurance business. The IRS used this information to show that he spent more time being an insurance agent than he did being a real estate professional. Unfortunately, the Joneses did not receive good advice going into 2011 and 2012. If they had, they would have been told that Mrs. Jones could have kept records to show that SHE was the real estate professional, thereby giving them both the benefit when they filed as married filing jointly on their 2011 and 2012 taxes. Mr. Jones should also have been advised to keep logs for both business activities as to how much time was spent each day on each business to document and be able to prove that he did spend more time being a real
Reprinted from National REI's Spring Edition of the RE Journal.
estate investor than he did being an insurance agent. Since you can’t go back in time and create records that are credible and reliable which can be submitted as evidence, I suggest you begin now in the early part of this year and keep records showing how much time you spend doing real estate versus any other business activity. I realize you chose to be a real estate investor because you want to be selfemployed and have the freedom that goes with that, but there are times you have to prove you are doing what you claim to be doing when called into account by the IRS. Being able to defend the highly-coveted tax deduction of being a real estate professional is one of those instances. The purpose of this article is not to list and explain all the requirements of being a real estate professional. Other resources are easily available for that. I want to explain some of the technical recordkeeping that is going to be required if you have other business endeavors besides being a real estate professional. WWW.MAREI.ORG
As I’m writing this, I’m thinking of a good friend of mine who is a real estate investor, and he is involved in a multilevel marketing company. My counsel to him would be to keep records distinct for both those business endeavors. How many miles did he drive each day relative to each business? How many hours each day did he work on real estate matters versus marketing matters? This would obviously require keeping separate and distinct business checking accounts and separate business operations. For those whose only source of revenue is working as a real estate investor, this is a reminder that you still need to keep records of your activities, such as the number of hours you work, because you do have to prove that you put in a minimum number of hours in the year. Fortunately, the time spent driving counts toward those hours, which underscores the importance of
keeping an adequate log for all your driving activities. I recognize that keeping records of all the things you do – all the places you drive and the purpose for the drive including beginning and ending mileage, how many hours per day you spend on real estate versus any other business activity – sounds like a colossal pain in the neck, but it is important you develop a system for quickly and accurately doing that. Keep a log in each vehicle you own with columns for the date, beginning and ending mileage, destination and reason for the trip. You can use a calendar to keep track each day of how much time you spend in your business activities. For those of you who include in your log the activity of driving around looking at houses, please keep a record of what houses you looked at or what neighborhoods you were in during the day.
Being in business requires you to become skilled at having systems and processes in place to make things run smoothly. The case of the Joneses is an example of the necessity of having systems and processes in place to keep track of important information to substantiate valuable tax deductions. After the Tax Reform Act of 2017, the real estate professional tax deduction is more important than ever before. Jeffery S. Watson is an attorney who has had an active trial and hearing practice for more than 25 years. As a contingent fee trial lawyer, he has a unique perspective on investing and wealth protection. He has tried over 20 civil jury trials and has handled thousands of contested hearings. Jeff has changed the law in Ohio 4 times via litigation. Read more of his viewpoints at WatsonInvested.com.
Ask any real estate investor and they'll tell you that time is money and the more time you have to spend cleaning up a mess - whether it's coordinating others or doing it yourself - directly eats into your bottom line. That's why National REIA has partnered with renowned debris removers 1-800-GOT-JUNK?. They are the full-service professionals when it comes to junk removal. Your membership in National REIA earns you 10% discount on services from 1-800-GOT-JUNK? Use Promo Code REIA when ordering at:
1800GotJunk.com RE INVESTMENT NEWS • PAGE
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FLOORING TRENDS TO IMPROVE INVESTMENT PROPERTY by By Will Hudson, Laminate and Vinyl Plank Flooring Merchant, The Home Depot Sleek, stylish flooring is an asset to any investment property. Luckily, recent innovations in flooring materials have increased the possibilities for luxurious yet affordable options. The following five trends are a great place to start when considering new flooring projects.
Digital printing also delivers variety that your tenants are sure to appreciate. Today’s floor printing machines reduce the number of repeat designs on tiles and planks, ensuring that the same pattern does not appear in multiple spots within a given room. This produces a more natural feel and adds realism that will make it harder for renters to detect a difference in material sourcing. LOAD ON LAMINATES
LET’S GET DIGITAL Due to new digital printing advancements, flooring styles that previously required premium materials or substantial installation costs now are achievable with less effort and investment. These design technologies eliminate boundaries between flooring materials and produce customizable tiles and planks in whatever style, color or finish. This also includes amplifying realism - if you desire a true-to-life appearance, look no further than rich designs ranging from knots and ripples in wood to wavy colors in marble. 14
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Much like its wood and tile counterparts, laminate flooring has evolved to a tougher and more attractive form in recent years. Laminate planks now feature a thick, sturdy design and resilient finish that deters scratching, offering a durability advantage for owners looking to rent their properties for years. As flooring technologies evolve, The Home Depot remains committed to driving innovative new ideas. Our merchants work with leading manufacturers to develop durable and
Reprinted from National REI's Spring Edition of the RE Journal.
advanced laminate, vinyl and porcelain tile. We worked closely with Pergo to develop Outlast Plus, a next-level laminate capable of withstanding water for up to 24 hours. This creates new opportunities to bring wood-look flooring into bathrooms, kitchens and other water-centric rooms previously considered off limits. Available exclusively at our stores, this product also includes an attached underlayment that reduces sound and makes installation faster, simpler and more affordable. RESURGENCE OF VINYL If you haven’t been involved in a flooring remodel for a while, you might be surprised at the evolution of vinyl. Previously considered primarily a lowcost option (think sheet tiles from the 1980s), vinyl floors now come in planks in a variety of trendy printed options, such as wood and stone looks. Vinyl is 100 percent waterproof, WWW.MAREI.ORG
versatile and extremely durable. This makes it a great choice for rental properties that may go through resident transitions from year to year. The vinyl floor will last much longer than a standard carpet and repairs involve swapping out individual planks rather than the whole floor. Modern vinyl flooring is also easy to apply, with tiles and strips able to go directly over existing surfaces without the need to remove the subfloor. The Home Depot’s exclusive LifeProof luxury vinyl planks uses drop and lock end joints that fall perfectly into place and reduce installation cost and time. Featuring an innovative rigid PVC core that delivers strength while remaining lightweight, LifeProof planks are an excellent choice when you need maximum durability. GO BIG WHEN GOING HOME With replica wood and stone becoming more popular, more property owners are gravitating towards large-format
tiling and planks. Flooring materials have reached unprecedented sizes in recent years – planks now run as long as four feet in length, squares can go as wide as 16 inches, and rectangles now hit sizes of up to 18x36. While larger flooring materials are bulkier and require more careful planning to install, they do require less time. To ensure a seamless, gap-free design, use a mortar specifically engineered for heavier tiles or planks. Custom Building Products’ Natural Stone and Large Tile mortar, for example, reduces lippage and produces a more level installation. ADD LOCAL FLAIR Flooring design trends are not universal and vary greatly by location. At The Home Depot, we see preferences for different styles of flooring across the country. Texas and the Southwestern region tend to prefer darker grey and brown flooring with a more distressed tone. Properties in more oceanic
regions, such as the East and West coasts, not surprisingly go more for lighter grey, white and cream colors that feel cool and casual. Likewise, areas more susceptible to colder winters, such as the Northeast, feature subtle accents ranging from beiges to tans. Depending on property dimensions and plans for the property, the exact parameters of any flooring renovation will greatly vary. However, an awareness of the latest trends and a mind for creativity can result in a floor that is brilliant, easy to install and a value driver for any property. Will Hudson, is a Laminate and Vinyl Plank Flooring Merchant, with The Home Depot. As the flooring Merchant, Will is responsible for merchandising the Laminate Flooring and Laminate Installation businesses for all U.S. stores and homedepot.com.
PROFESSIONAL GRADE PAINT SOLUTIONS Partner with The Home Depot
The Home Depot offers a wide range of professional grade interior and exterior paint, stains, primers and more. NREIA Members can get the competitive advantage with savings on paint and supplies.
20% Discount on all Paint at the Home Depot for MAREI Members. Details in the Member Benefits Magazine. ◊All installation services provided by insured, licensed (where applicable) and background-screened independent contractor The Home Depot Authorized Service Providers. License numbers held by or on behalf of Home Depot U.S.A. Inc., available at homedepot.com/licensenumbers or at the Special Services Desk in The Home Depot store. Installation services not available in all areas. We reserve the right to limit quantities to the amount reasonable for our regular customers. In the event of an error, we will make every reasonable effort to accommodate our customers. Details on any product warranty available at store. See contract for guarantee details. ©2015 Homer TLC, Inc. All rights reserved.
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RAISING $ FOR HARVESTERS MAREI has held a networking vendor meeting attendees all coming together night every summer since 2004. to learn, to network, to talk a little baseball and to collect monetary Along about 2013, this became a free donations to Harvester's to feed Kansas event, asking the vendors to pay City's hungry. their sponsor fee to a local charity, and asking all attendees for a $5 Attendees to this event are asked for a donation at the door for entry. $5 donation at the door, which buys them 1 raffle ticket for door prizes, 1 The charity MAREI has supported hotdog, and 3 hours to network and ask since 2013 has been the local food questions. bank Harvesters. Sponsors are asked for a $50 or more In 2015, when the Kansas City donation and a door prize for the raffle. Roayls managed to be snag many of They can also make a donation to place the American League positions for an ad in this publication. the All Star Baseball game, MAREI came to the realization that the Expert Coaches volunteer time to host a monthly meeting night in July falls on coaching table on various topics where All Star Game Night. attendees can ask questions and learn. With this realization the first All Star All proceeds go directly to Harvesters. Networking night became official. Over the years we have raised $1,000 This meeting features vendor and provided tens of 1000s of meals. sponsors, local expert coaches, and Our goal this year is to provide 10,000 meals.
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We are asking all MAREI Members to mark their calendars for July. We hope to have not only our 4th Annual All Star Networking to Benefit Harvesters on Tuesday July 10th, but to also have our members register and run their own food or fund drive and to have a volunteer day where we can all go down a and donate some time to Harvesters. We need your help: Vendors, we will be again asking for a donation directly to Harvesters to reserve booth space as well as a small $25 door prize for the raffle. We would love Vendors to boost the fun and the raffle sales at their own booths. We will also be looking for volunteers to host an "expert" table, which will not have a fee but we will ask you to donate 1 hour of your time to be raffled off. We are also looking for an auctioneer and a few cheerleaders to help us promote this event. Email Kim@MAREI.org if to learn more.
WWW.MAREI.ORG
VISIT
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. Accountant
Building Supplier
Coleman Accounting Service Bob Coleman www.ColemanAcctg.com 913-787-0308
DeMayo Enterprises Wholesale Cabinets Mark Yanda www.DeMayoEnterprises.net 913-980-4260
Attorney Anderson & Associates Evictions / Collections Julie Anderson www.MOKSLaw.com 816-931-2207 Rick Davis Legal Real Estate Law Rick Davis www.RickDavisLegal.com 913-283-8300 Auction Company Auction.com Rachel Bailey www.Auction.com 816-797-6875
Joe’s Carpet / Weber Flooring Jerry Ratway www.WeberFlooring.com 913-236-3680 The Home Depot George Neal 816-461-9583 2% Rebate / 20% Off Paint Details in Member Benefits Contractor Hearth Masters Fireplace / Masonry Gene Padgitt www.ChimKC.com 816-461-3665 Genesis Home Restorations Mold Remediation Terry Amerine GenesisHomeRestorations.com 913-270-0812
MAREI.org click on Business Associates
HCS Restoration KC, LLC Mike Peace HCSRestorationLLCKansas.com 913-731-6537 NuLook Custom Finishes Cabinet Refinishing Carol Baldwin www.NuLookFinishes.net 913-385-2574 Serve Pro East Independence/ Blue Springs Crytsall Gregg www.ServeProEastIndependence BlueSprings.com 816-224-5300 Under Pressure Property Services Rehab, Maintenance, & Staging Dallas Kidd www.MyUnderPressure.com 913-274-9555
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Insurance Agema Insurance Fred Dickinson www.AgemaIns.com 913-543-8116 Arcana Insurance Rental, Vacant, Landlord & More NREIA.ArcanaInsurance HUB.com 877.744.3660 Self Directed IRA Equity Trust Company TrustETC.com/NationalREIA FREE Training 844-732-9404
North Oak Investments Hard Money Tommy Nigro www.NorthOakInvestment.com 816-249-1001 REI Investor Funds Hard Money Charlie Fitzgerald www.REIInvestorFunds.com 913-904-8090 Revolver Finance Hard Money Jeremy Hanna www.RevolverFinance.com 316-880-1611 Marketing
Properties Bridge Turn Key Investments Turn Key Provider Nathan Brooks www.BridgeTurnkey.com 913-276-4114 McKinnis Real Estate Turn Key Provider Nick McKinnis McKinnisRealEstateInvestments.com 816-914-2614 KCInvest Investment Properties Scott Tucker & Kim & Don Tucker www.KCInvest 913-735-0018
Lending Flat Branch Home Loans Morgtgage Banker Beth Langston FlatBranchHomeLoans.com 816-479-5841 x 1148 Crossroads Investment Lending Hard Money Britton Asbell / Doug Harris www.KCLend.com 913-800-8226 House Traders Monthly Meeting Investors Choice Funding Hard Money Scott Ficinus InvestorsChoiceFunding.com 816-668-7223
Constant Contact Email & Social Media Marketing FREE Trial MAREI.org/ConstantContact Investor Carrot Investor Websites Free Training & Discounts www.MAREI.org/IC Pat Live Answering Service Discounts www.MAREI.org/PatLive Zoom Video Conferencing www.MAREI.org/Zoom Office Supply
Longhorn Investments Hard Money Mike Minor www.LongHornInvestments.com 913-209-8630 Merchants Mortgage Mushy Money Susan Aubin www.MerchantsMtg.com 303-514-0815
Office Depot / Office Max www.OfficeDepot.com Discount Link & Card in Member Benefits Package Pest Control BedBugTraps.com Stop BedBugs Discounts for Members
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 Lotus Key Homes Loni Louis Bernard www.LotusKeyHomes.com 816-838-7368 M & M Property Pros Michael & Michele Bellman www.MMPropertyPros.com 816-490-6745 Realtor Realty Resource Scott Tucker www.RealtyResourceKC.com 816-284-7844 Show-Me Real Estate Dan Hartman www.Show-MeRealEstate.com 816-532-6101
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WWW.MAREI.ORG
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 Servicing Escrow Services Inc. Loan Servicing Nationwide www.EscrowServ.com Title Company 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
MEMBER SPOTLIGHT MARY KELLOG ALPHA TITLE INC Mary Kellogg is the escrow closer at Alpha Title who attends many of the MAREI meetings and is always there to answer a question or lend a hand at an event. Joining MAREI in 2014, Alpha Title has been serving our members with closings and title along with all the other services that title companies offer. An avid Royals fan as Mary's Facebook profile will show you, Mary has been working in the Title Industry since 2005 where she started her career working with HUD transactions. Reach out to Mary at (913) 498-8999 or visit the website at AlphaTitleInc.com
JunkLuggers Eco Friendly Junk Removal Olivia Jones www.JunkLuggers.com 816-905-2204 Want to be listed in our directory, join MAREI as a business member. Details at MAREI.org. RE INVESTMENT NEWS • PAGE
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INTRODUCING OUR
Investor Membership ONLY
9 9 $ R E B M ME m e r i c a
m i d - a IATION of ASSOsCtate Investors Real E
MEMBERSHIP INCLUDES Whether you're at the beginner, intermediate or advanced levels, MAREI Membership will give you the tools you need to grow as an Investor.
Community
Training
Advocacy
12 Live Neworking Meetings a year. Plus unlimited connections MAREI's Social Media.
5 Live Training Events, Online Member Library, Webinars, and More throughout the year.
Fighting for your industry through National REIA, Missouri POA and the Associated Landlords of KS. Keeping You Informed.
Savings Save $1000s through our many local and National Discounts at places like Home Depot, Office Max and more.
Find out more and become a MAREI member today at: www.marei.org/membership/