JANUARY 2018
RE N E W
INVESTMENT
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NEWSLETTER OF MID-AMERICA ASSOCIATION OF REAL ESTATE INVESTORS
THIS ISSUE Member Websites PreScreening Contractors Increase Your ROI on Keepers MAREI Business Directory
REHAB QUEEN ROBYN THOMPSON 2 DAY WEALTH BUILDING WORKSHOP JANUARY 13TH & 14TH PG 13
MAREI.ORG
REAL ESTATE NEWS Tax Reform, Predictions Net Neutrality, Self Closing Doors, Renters Insurance, Missouri Prefiled Bills Missouri POA Advocacy Day National REIA Awards of Excellence Winner 2017
MAREI.ORG/CALENDAR
THE CALENDAR
PUT $20K IN THE BANK EVERY MONTH Robyn Thompson is the nation’s leading expert on buying properties at deep
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discounts, renovating them fast and selling them quickly for huge chunks of cash. She takes her business very seriously and has turned it into a fine-tuned machine. She has rehabbed well over 390+ properties in her investing career and rehabbed as many as 51 houses in a single year. She will be joining us on Tuesday, January 9th to share a few of her systems that will allow you to put $20K in the bank every month from retailing. 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. Robyn will have an audio CD " Rehabbing Creates Big Fat Checks: for all who pre-register and attend AGENDA
NEW MEETING FORMAT
Networking Hour: As always we will have our Vendor Hall, Our Business Card and Deal Table and General Networking from 6 to 7 pm. Come early, bring a flyer for the deal table, talk to the vendors and network.
Speed Table: This is in the planning stages and we hope to have a couple of tables and 12 chairs. We hope to have 2 15 minute speed rounds, but we do need a See full day coordinator. 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.
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Ten Minute Topic: We are adding a 10-minute topic to the beginning of the page meeting at 7 pm, This month we will be focusing on member websites. Announcements: MAREI & Vendors Announcements at 7:10 Speaker: Robyn Thompson will start at 7:30 and run till 9:00 DEC WKSHOP
REAL ESTATE WEALTH WEEKEND WORSKHOP
Robyn Thompson will be joining us for two full days on January 13th and 14th to share more of her system for buying junkers, fixing them fast and selling them for active investing profits. On Sunday, she will be sharing her pretty house business of buying nice houses for passive rental income. Combine both strategies to build Massive Real Estate Wealth. FROM 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 TAX REFORM Tax Reform was passed, delivered to the President and signed last week. There will be a lot of changes coming. The highlights include: The corporate tax rate was permanently reduced from 35% to 21%. Individual Tax rates were reduced Mortgage Interest, State & Local Taxes, not eliminated but capped, not a big deal for KC area, more so for urban east coast areas. Pass Through Entities, like LLCs received about a 20% tax deduction, but there are restrictions. There are more changes and you can read a full analysis of Tax Reform and the Real Estate Investing Business at www.MAREI.org/TAX
HOUSING PREDICTIONS Zillow predicts an even tighter housing market in 2018. Millennials just started entering the evertightening housing market, snapping up more of the limited inventory. Homeowners will remodel their homes rather than new ones, further limiting inventory. New homes being built and those being
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remodeled will have aging baby boomers and the millennials in mind who want livable spaces for multi-generations. As the cost of urban living grows, millennials will turn to the burbs. And home prices will continue to grow but at a slower pace. Learn more at MAREI.org/2018
NET NEUTRALITY The Federal Communications Commission announced a rollback of net neutrality rules, sparking a swift rebuke from the nation’s 1.3 million REALTORS®. National Association of Realtors believes consumers would suffer from downgraded services across the internet in such a scenario. At the same time, small businesses that either couldn’t pay the new fee or couldn’t negotiate such an arrangement for themselves would face a significant competitive disadvantage, losing customers to faster websites. Learn more at MAREI.org/NetNeu
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SELF-CLOSING DOORS
RENTER'S INSURANCE
Do your rental properties have self-closing doors? The last week of December saw a 3-year-old starting a fire in the family apartment while playing with the burners on the stove. The child's mother found the child and the fire and fled the apartment. All news reports state that the apartment door did not close and the fire quickly spread into the hall and up the stairwell. This fire killed 12 people.
December saw two fires in the same small apartment building in Kansas City. They believe the cause of the first fire was an electrical problem they are unsure of what caused the second fire. What is known, however, is that none of the tenants had renter's insurance.
The fire marshall explained that the fire spread so quickly because the door did not close. Department of Housing Preservation and Development spokesman Matthew Creegan says that New York City cited landlords over 7,752 times in the last year for violations of the self-closing-door requirement. It is not known if this was an issue in this fire. Do you have multi-family units that have doors opening onto a central shared hall? Do you have any units that have doors that connect the garage to the living space? Are those doors fire rated and are they self-closing? Take the time to educate yourself on city codes on your rentals and your own home. Invest a few dollars to upgrade doors as needed and to upgrade to self-closing hinges where needed. The life you save could be your own. Please visit www.MAREI.org/SelfClosing for more info on fire safe doors and self-closing doors.
When there is a fire in a rental unit, the landlord's insurance should cover the cost of the repairs to the building. But when it comes to the tenants belongings in the unit and paying for a place for the tenant to stay, unless they have their own renter's insurance policy, they may be facing the same problems as the tenants in this Kansas City fire, no place to live, all their stuff destroyed and no funds to secure temporary or new housing and no funds to replace their stuff. We urge all landlords to educate their tenants on fire safety and renter's insurance. This is such an important part of renting a property to a new tenant that MAREI & National REIA partners RentPerfect.com, the tenant screening company prompts your applicants to get a renter policy from RealProtect.com. Learn more on this topic at MAREI.org/RenterInsurance
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MISSOURI PREFILED BILLS The Missouri Legislative Session starts January 3rd and there are 100s of bills that have been prefiled. Out of those 100's there are several that MAREI Members should be aware: MO HB1508: Provides that no person or entity that rents or leases real property shall be required to obtain a business license by any political subdivision. SUPPORT MO HB1510: Changes the laws regarding local ordinances so that no political subdivision may require interior inspections of private residences without the consent of the lawful occupant. SUPPORT MO HB1369: Revises the definition of "service dog" to include animals that provide support or therapeutic functions for individuals with psychiatric or mental disabilities MO SB581: AN ACT To repeal section 535.300, RSMo, and to enact in lieu thereof one new section relating to security deposits held by landlords. SUPPORT MO SB605: Modifies provisions relating to unlawful discriminatory practices in housing MO SB620: Modifies and creates new provisions relating to unlawful discriminatory practices MO SB720: Creates the Missouri Radon Awareness Act The Missouri Property Owners Association is very interested in the outcomes of HB1508, HB1510, and SB581. MAREI is supportive of Missouri POA's efforts and invites all MAREI members to take action when asked throughout the next few months.
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Please visit and bookmark www.MAREI.org/Legislative to check back regularly for the latest updates and calls to action. While there make sure you are registered for our E-Mail updates as MAREI may have an issue that needs immediate action.
MISSOURI POA ADVOACY DAY Missouri Property Owners Association (POA) is hosting the first every Advocacy Day for real estate investors, landlords, property managers and property owners in Missouri. The event is planned for Wednesday, January 17th and will be held in the Missouri State Capitol Building. This day coincides with the first day of the Missouri Realtors Advocacy Days, This event will start with all attendees meeting to determine which legislators they are to speak with and to collect handouts on the key issues that the organization support. Attendees will then divide and meet with legislators in their Jefferson City offices. Everyone attending please RSVP on the MissouriPOA.org site or by calling the Missouri POA Committee Chair Howard Adams at 816-3580900. All who have pre-registered are invited to join the last minute planning conference call on Thursday, January 11th at 9 am Complete details and links to sign up on the Meetup Group or Facebook Group can be found their website at www.MissouriPOA.org
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MEMBER WEBSITES MEMBER BENEFIT
Have you seen a property or two on the MAREI website? Perhaps you received a Property Leads email from MAREI with a list of property? Did you wonder how the property ended up on that page, email or post?
These investor websites are an excellent tool for the investor just getting started who needs a website. If a member joins with a spouse or business partner, set up one site to market to buyers and the other site to market for sellers. Or set one up to market wholesale properties and one for rental properties.
MAREI Member Benefit
sends out an email of all newly posted properties for the week on Friday to all members and guest in the system. 4. MAREI Staff adds the newest properties to the MAREI EUpdate athat is sent every other week. Exposure to MAREI Database
Marketing Properties All Members receive an investor website as a benefit. If a member adds a business partner or spouse, both members receive a website. This is one of the most underutilized benefit of membership. MAREI would like to change that.
For those members with properties that would be marketed and sold to other real estate investors, these FREE website come with a few more built in features. All properties posted on your investor website will be loaded into MAREI's automated marketing and sent out for you in the following ways:
These investor websites are an excellent tool for established investors to use to drive traffic back to a contact collection page. To make sure all members know how to activate their website and post properties, MAREI has created an instructional video.
Key Features 1. List and advertise your own properties on your own website.
1. Property will appear on your FREE Investor Website.
2. FREE Report for sellers.
2. Property will appear on MAREIMember.com and MAREI.org
3. Collect Buyer and Seller Info
3. The MAREIMember.com website
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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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WWW.MAREI.ORG
CONTRACTORS
HOW TO PRESCREEN & BUILD YOUR TEAM
Robyn Thompson Many real estate investors shy away from the house business because they fear hiring contractors. We have all heard the horror stories of rehabbers who lose their shirt because a contractor took them to the cleaners. I am here to tell you that contractors can be your worst enemy or your best friend, depending if you hire a good one or a bad one. So how can the beginning novice real estate investor make the correct choice- the hard working team player that gets the job done on time, on budget and at a high standard of quality? The answer is by following all eight of the critical prescreening steps below. Ask the contractor you are interviewing, how long they have been in the business? I prefer at least five years of 08
experience in the trades. I want a contractor who has seen and repaired every strange, odd, and crazy thing that could be wrong with a house. Experienced contractors know how to estimate all tough projects and experienced professionals can give an accurate price to fix any problem. Inexperienced contractors, on the other hand, underestimate repairs to get the business, and then they try to push their mistake on the homeowner by upping the price halfway through construction. The investor needs to say NO. NO is the most powerful word in the dictionary, and a rehabber needs to use this tool. If they did not have the knowledge to make a good estimate, it is their problem, not yours. Ask for three references from the last three major projects that the contractor has recently completed. Once you receive the reference letters, make sure you call to verify the
references and the quality of the workmanship performed. The quality of work should be satisfactory to the homeowner and should have been completed in a timely manner. If any of the references don’t check out do not hire this contractor. If they gave you false information upfront, you know they can not be trusted. Move on to the NEXT quote. Ask for a copy of the contractor’s license (if required in your state) and for a copy of their workman’s comp insurance. Once you receive a copy of their license, make sure to check that they are not suspended. Also, check to see if any complaints have been filed against the contractor with the Better Business Bureau. It is absolutely mandatory that a contractor prove that he or she has workman’s comp for all the employees RE INVESTMENT NEWS • PAGE
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that will be working on the job site before they start renovations. Why is this so important? Well, if one of the workers has an accident, you do not want to be sued as a potential employer. Make the contractor pull all necessary permits required by your local building department. The homeowner should NEVER pull the permits. The contractor should also be responsible to pass all necessary inspections required throughout the construction process so a certificate of occupancy (CO) can be obtained when construction is complete.
workers could be viewed as the home owner’s employees per the IRS guidelines. You do not want this.
I will contact the supply houses to make sure the contractor is not behind on paying for materials because I do not want to give the contractor a check to pay off an old bill and they have no money for the materials they need to buy for my job.
The real estate investor should always demand a six month to one year warranty of all parts, labor, workmanship, and materials provided by the contractor.
The last words of advice that I can give to anyone beginning a renovation project is to make sure every agreement with a contractor is detailed in writing with an independent contractor agreement. A detailed list of materials required should be listed in the comprehensive scope of work. The documents should have work completion time frames, penalty clauses for finishing late, require all permits be pulled and inspections completed before final payments are released.
This warranty should be in writing. WARNING: If a contractor will not provide a warranty and stand behind the quality of his or her workmanship- DO NOT hire them! Real estate investors should never agree to pay any contractor by the hour.
The real estate investor should make it mandatory for all contractors to buy all necessary materials to do the renovations.
You pay a fixed price for the complete job. Never pay the final payment in your independent contractor agreement until the project is 100% complete
The investor should never waste their valuable time buying materials. If the investor buys the materials, the
Ask for financial references (ex: where the contractor purchases materials).
How You Can Put $20K In The Bank Each Month Robyn is the nation’s leading expert on buying properties at deep discounts, renovating them at lightning speed and selling them quickly for huge chunks of cash. She takes her business very serious and has turned it into a finetuned machine. She has rehabbed well over 390+ properties in her investing career and rehabbed as many as 51 houses in a single year. She treats her real estate investing business as a serious cash machine and not just a hobby. She will be sharing howyou can get started & put $20k in the Bank Every Month Rehabbing Houses. Register at www.MAREI.org 10
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Members & 1st Timers FREE WWW.MAREI.ORG
With your National REIA membership, you will receive specially negotiated rates of 3 cents per Voice Broadcast, 2.5 cents for Text Messages. Details in Membership Benefits Magazine
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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INCREASE YOUR ROI
by Reducing Vacancy on your Keeper Properties by Robyn Thompson
2. Price Your Property Correctly
1. Do Your Homework Before You Buy
It is important to have the competitive edge in rent for tenants. Look at the other rentals in the MLS and on various rental sites (www.rentals.com, www.rent.com, and www.forrent.com). If you offer a good price compared to the competing properties, it will rent faster than the other properties.
Location, Location, Location… Sea ch out the areas that have low vacancy rates. Talk to local realtors, property managers, and seasoned investors who have been renting units for over a decade before you take the plunge and buy a property. For example, I want to own property were supply of rental properties is low and the demand is high. I own properties in a town where the schools are in the Top 50 Schools in America. Demand for rental property is high and my average days on market to rent are usually less than 2 weeks.
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3. Make Sure Your Property is in Drop Dead Gorgeous Condition All tenants want to live in a really nice home and when they are happy there, they don’t move. I had a tenant in Connecticut that loved their kitchen and bath in my rental property and lived there for 12 ½ years! The house was in such great condition when I rented it to her that I
never stepped foot into the house during the entire time that she rented from me. 4. Go After Long Term Leases with Tenants This is why I usually don’t raise the rents on my tenants at the end of the first year when the lease expires. I usually offer a 2 years lease with no rental increase as long as the tenants pay on time every month. The longer the tenant stays in the house, the deeper their roots go into the neighborhood and community. The worry of costly vacancy will be avoided for more than 24 months. 5. Respond Quickly to Tenant Requests
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When a tenant calls about a clogged toilet, an air conditioning that is not cooling, or any other malfunction, then the landlord or property manager should respond quickly. Remember that unhappy tenants move. Move outs are extremely costly for property owners. I have some properties that are over $2,000 per month. Those vacancies hurt your profit margins greatly! I like to have the maintenance person on site less than 24 hours for all minor issues. 6. Don’t Wait Until the Last Minute Before the Tenant Moves Out Start advertising before the tenant vacates so you have multiple new prospective renters ready and excited to look at the upcoming property. I want to do a walkthrough 2-3 weeks the tenants move out so I can have all the handymen and contractors lined up to do the necessary repairs the minute that the tenant moves out of the property! Every day that the property is vacant, you are losing money! 7. Lease with the Option to Buy This option will attract a high caliber Rent to Own tenants who are looking to test drive a property prior to committing to home ownership. In the Rent to Own situation, the tenant gets time to get accustomed to the neighborhood, schools, and surrounding areas without being rushed to buy a property. They will be more likely to pay their rent in a timely manner to avoid losing their right to buy. This strategy can also save the 6% in realtor commissions. If the property is in an area that is appreciating rapidly, be careful not to set the option price too low because you want to get all the appreciation as the prices in the neighborhood climb upward.
MASSIVE WEALTH BUILDING WEEKEND FLIPPING: Robyn Thompson has made retailing homes a science & she knows every technique imaginable to locate profitable deals, renovate distressed properties at fast, minimize holding costs, qualify good credit buyers & expedite closings so you can collect a big check. In this special one-of-a-kind workshop right here in Kansas City, Robyn Thompson will show you more of her proven, effective, affordable methods that she briefly touched on at Tuesday’s meeting. CASH FLOW: Robyn Thompson realized early on that she would not want to HAVE to flip houses each and every month. So she started picking and choosing her keepers that provide her enough monthly cash flow from rental income that she could retire tomorrow. Come pick Robyn's brain on her "advanced strategies" and learn how she built her massive Buy and Hold Portfolio and how you can too.
SATURDAY & SUNDAY JANUARY 13 & 14 Pre-Register at MAREI.org Early Bird Pricing Through January 10th Early Price Members $59 Non-Members $89 Add Business Partner $20 Add Family Member $20 Regular Price after Noon the 10th Members $99 Non-Members $129 Add Person $40 Special Promo Code Saves $20 MAREISave
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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. 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 14
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Joe’s Carpet / Weber Flooring Jerry Ratway www.WeberFlooring.com 913-236-3680
VISIT
MAREI.org CLICK ON
business associates
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
KC Grout Works Tile Refinishing DJ Hoffman www.KCGroutWorks.com 816-448-5579 Insurance
Hearth Masters Fireplace / Masonry Gene Padgitt www.ChimKC.com 816-461-3665 Genesis Home Restorations Mold Remediation Terry Amerine GenesisHomeRestorations.com 913-270-0812
Real Protect by Norton Rental, Vacant, Landlord & More Julie Johnson www.RealProtect.com 1-800-579-0652 Self Directed IRA Equity Trust Company TrustETC.com/NationalREIA FREE Training 844-732-9404
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Lending 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 Merchants Mortgage Mushy Money Susan Aubin www.MerchantsMtg.com 303-514-0815 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 Pat Live Answering Service Discounts www.MAREI.org/PatLive
Zoom Video Conferencing www.MAREI.org/Zoom
Royal Gate Management Ryan Goyer RoyalGateManagement.com 913-735-7783
Office Supply Realtor Office Depot / Office Max www.OfficeDepot.com Discount Link & Card in Member Benefits Package Properties 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
Realty Resource Listing Agent Scott Tucker www.RealtyResourceKC.com 816-284-7844 Screening Rent Perfect Tenant Screening Plus Heather Johnson www.RentPerfect.com 877-922-2547 Discounts at www.MAREI.org/RP 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
Home Rental Services Paul Branton www.Home4Rent.com 913-627-9543 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
a of m i d -C N O I T IA
ASSOstate 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
12 Live Neworking Meetings a year. Plus unlimited connections MAREI's Social Media.
Training
5 Live Training Events, Online Member Library, Webinars, and More throughout the year.
Advocacy
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/