RE N E W S

INVESTMENT

NEWSLETTER FOR
MID-AMERICA ASSOCIATION OF
REAL ESTATE INVESTORS

THE ART OF THE DEAL

from Chris McClatchey

WHOSE TERMS
Control the Deal by Controling Terms
from Jeff Watson

AUGUST 2016

PLUS
Legislative Update
Calendar of Events
Market Update
Business Directory

Renters Insurance
Protects Your
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By requiring your tenant to carry
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Renter's Insurance
Protects tenant's belongings
Provides tenants with personal
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In the case of tenant caused loss,
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Avoids you otentially becoming
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GetaQuote!

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phone: 800-579-0652 (#3)
jjohnson@realprotect.com

LEGISLATIVE UPDATE

Seller
Financing
Reform is
on the Way

AUGUST 2016

The Seller Finance Enhancement Act (HR

5301) was recently introduced in Congress
by Rep. Roger Williams (R-TX) and Rep.
Henry Cuellar (D-TX). The bill will
increase the number of allowable sellerfinanced properties from three to twentyfour per year. The two per month average
was considered a reasonable request to
the excessive restriction put in place by
Dodd-Frank legislation during the recession.
Additionally, HR 5301 would require the
Treasury Department to study the
housing fnance market over the next three
years and report back to Congress with
suggestions for steps to improve the sales
and fnancing of these homes, especially
those with valuations below $150,000 or
60% of the regional median

housing value.
HR 5301 keeps in place key consumer
safeguards set in place by Dodd-Frank such
as limits on interest and balloon payments.
The Seller Finance Coalition, of which
National REIA is a leading member has been
working diligently to see this bill come
forward and will continue to grow the
number of sponsors as passage is ultimately
sought.
Current sponsors include: Rep. Roger
Williams (TX-25) and Rep. Henry Cuellar
(TX-28), as well as original co-sponsors Rep.
Jim Bridenstine (OK -1), Rep. Alan Grayson
(FL-9) Rep. Mick Mulvaney (SC -5), Rep.
Randy Neugebauer (TX- 19), and Rep. Bobby
Rush (IL-1).
The Seller Finance Coalition was formed in
February of 2014 to advance the interest of the seller fnance industry. Founding
members of the SFC include Glenn Lee
of Texas Funding, Bob Repass and Eddie
Speed of Colonial Funding Group, Scot
Campbell of S.R. Campbell Properties, and
Doug Smith of My House Deals. National REIA has been a member since 2015.

CALL TO

ACTION
Your help is needed now! We need
you to contact your member of
Congress and urge passage of HR
5301.
Visit NationalREIA.org/legislative
for more information and to
download a letter you can
use to personally contact your
Congressman!

RE INVESTMENT NEWS

THEARTOFTHEDEAL
Do you ever wonder why some
investors do a lot of deals and
other investors cant seem
to find even one deal?
I have wondered this for a few years. So I
started looking for the key differences in what
makes a successful investor. What I observed
came down to one thing. Communication!!!

generate leads; 2) They analyze the

deal; 3) They make offers; and 4) They
negotiate. These are the four things
that all investors need to do on a
consistent basis to be successful.

When I first began to study the different types

In addition to studying the different
of real estate investors, I realized investors
types of investors, I began to watch
universally do four things. 1) They
4

MAREI.ORG

By
Chris McClatchey
closely at their education programs
and the subject matter of what they
teach. It was very interesting to me
that almost all of the educators
taught three of the four items above.
Their strategies all had the same
three items packaged up. They
taught you how to generate leads,
how to analyze the deal and how to
write up the offers. Curiously, I dont
recall any of them that taught or sold
on how to negotiate
As I finalized my observations, it
came to me. Everyone focuses on

COMMUNICATION

Leads, Analysis and Offers, but only the

successful investors focus on Negotiation. It
is well documented that the extent of your
wealth is in direct correlation to your ability
to communicate. Its why public speaking is
the highest paid profession on the planet.
What the successful real estate investors
realize is that the entire process is
negotiation and how they communicate
directly relates and reflects on the success of
getting deals done.
So here are some tips on how to be a Master
Communicator:
A) Successful Investors realize that
Communication = Negotiation - This
starts from the very beginning. From the
time a lead is generated, a relationship is
started by taking that initial phone call.
Thewords and phrases that are used in the

very beginning establish the relationship

and greatly affect the outcome.
B) Successful Investors develop real
relationship with Sellers and Real Estate
Agents - I call this the 7 Touch Approach.
In order to develop a relationship or have
a rapport with someone, it will take a least
7 touches of communication with them.
The more touches you have, the more of a
relationship you have, the more deals get
done.
C) Successful Investors realize their offer
begins the negotiation process Have you
ever heard the phrase make a good first
impression? The successful investors
know that their offer is the first impression.
One of the things I teach is how to write
your offer from a giving perspective and
not from a taking perspective.

T.E.R.M.S

When writing offers, most investors

tell the seller what they want from
them. If your offer uses words and
phrases that take from the seller, you
are starting the negotiation off on the
defensive. When someone is taking
something from you, your defense
mechanisms go up. We write offers
from a giving perspective. People are
much more receptive when you give
them something. Hence the negotiation
gets off to a better start.
If you are not doing deals or as many as
you would like, start focusing on your
communication skills. Anyone can
implement a Leads, Analysis and Offer
strategy. However, if you want to
separate yourself from the rest of
investors, you need to pract

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

Saturday, September 17th 8pm to 5m

Holiday Inn, Overland Park : Lunch Included
Member Price $49 thru 9 /14 - $69 after 9/14
Non-Member Price $79 through 9/14 - $99 after 9/14

RE INVESTMENT NEWS

MAREI.ORG/CALENDAR

THE CALENDAR
FROM OTHER GROUPS >

MEETING

GETTING TO YOUR 1ST

DEAL WITH CHRIS

WINVESTORS
Hosted by Brian & Michelle Winberry
Wednesday Mornings at 9 am
Lucky Brewgrill
5401 Johnson Drive, Mission

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

new endeavor in real estate, Chris Hiebert has the tips. Be sure
to RSVP Online and join us Tuesday August 9th at the Holiday
Inn at 8787 Reeder Road from 6pm to 9pm. FREE for
Members and 1st Time Guests. All others pay $25 at the door or
$15 when they pre-regsiter at MAREI.org.

1ST SATURDAYS
Hosted by Jim & Beth Kasper
1st Saturday of the Month
Networking Coffee / Denny's
9001 Shawnee Mission Pkwy, Mission

1ST TUESDAYS
Hosted by Crossroads Investment
Lending & JD Asbell
White Board Discussion
7759 Shawnee Mission Pkwy, OPKS

LANDLORDS
Landlord Inc of KCK
3rd Tuesday of the Month
Loan Star Steak House
1501 Village West, KCK

JACKSON CO REI
Jackson County REI Group
Last Wednesday of the Month
4 West Monroe Street
Buckner, Missouri

MEETING

THE POWER OF ZERO

Chis McClatchey has developed a systematic approach to investing which
involves his "Power of Zero" technique to purchase 80 rental units, valued at
over $5 million dollars, in the just a year and a half with No MoneyD own
and / or with Zero Percent Financing. He is going to teach you how you can
do it too at the September 13th MAREI Meeting. !Be sure to RSVP Online
and join us at the Holiday Inn at 8787 Reeder Road from 6pm to 9pm.
FREE for Members and 1st Time Guests. All others pay $25 at the door or
$15 when they pre-regsiter at MAREI.org.

See full day

workshop
page 5

OCTOBER

BUILDING WEALTH WITH YOUR IRA

There are many different opportunities to grow
wealth not only with your Self Directed IRA, but
also with a 401k, a Health Savings Account as well
as Coverdale Education Savings Accounts.
We are devoting the month of October to learning
more about investments we can use to grow these
accounts.
Please mark your clanedar for Tuesday October 11th
and Saturday October 22nd. We may add a few
more webinar events, so watch the calendar of
events.

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

MARKET UPDTATE

june 2016

4,186 $16k 3,909

homes sold

4.0% Increase over 2015

57

average days on
market

pending sales

16,822 average
sale price
increase from
same time last
year (7.9%)

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

9.4% Increase over 2015

8,582
houses for sale
27.8% decrease
2.8 month supply

16.2% Decrease from 2015

97.7

of asking price

1.7% Increase over 2015

Sales and prices have been going up in most areas, while the number of homes for sale and
total months' supply of inventory have been going down. Meanwhile, many sellers have been
getting a higher percentage of their asking price, and supply continues to struggle to meet
demand. The message may be repetitive, but it is largely positive.
The national unemployment rate recently dropped 0.3 percent to 4.7 percent, but some states
felt more of a pinch in their own figures. Similarly, the low inventory situation is showing signs of
strain in markets where there are few homes for purchase. With an interest rate increase still in
the cards this year, combined with the American political landscape and global economic
events, a cooldown could occur by winter. Presently, however, summery growth prevails as
many locales are reaching near-record prices not seen in more than a decade.
For further detail see http://www.kcrar.com/statistics

Whose Terms?

The person who controls the

terms, controls the deal.
One of the things I frequently get to do is
speak to groups of beginning investors about
mistakes they need to avoid. One of the items
I teach on is the importance of understanding
the terms of the deal before you actually do it.
As Ive mentioned previously, I go so far as to
say that if you cannot explain the deal in three
sentences or less in a way that an 8 year old
8

MAREI.ORG

can understand it, then you dont understand the

deal well enough and should not do it.
I want to go a little deeper on this subject of
understanding the terms. Part of understanding
the terms of the deal is understanding who is
controlling the terms. Lately, I have seen a
number of individuals who have made loans,

Article from Jeff Watson &

WatsonInvested.com

either with a self-directed retirement

account or other funds, using documents
(particularly promissory notes) prepared by
the borrower. They are lending money in
accordance with terms set forth by the
borrower. That doesnt make sense to me,
thus the question, Whose terms? Are you
using the terms set forth by the lender or

TERMS

the borrower?
Since it is the lenders money, I believe the
lender should be able to control and establish
the terms under which their money is
borrowed. Those terms include such things as
how a late fee is calculated, what happens with
a default interest rate, and what requirements
are placed on the borrower to make sure taxes
and insurance are properly maintained on
property that is used to secure the loan being
made to them. I dont have time to cover them
here, but there are other key terms and
technical items that need to be fully understood
and controlled by the lender before they make
the loan.
In addition to the promissory note, an equally
important document that needs to

be understood and controlled by the lender

is the mortgage, deed to secure debt, or deed
of trust that is being used to secure the loan
to a piece of real estate. Im going to let you in
on a little secret. On a somewhat regular
basis, Im asked to prepare mortgages in
conjunction with closings taking place here
in northeast Ohio. I can be asked by either
the neutral title company which is handling
the escrow provisions and the money in the
title exam, or by the lender.
When I prepare a mortgage at the request of
the neutral title company, I prepare a very
brief, vanilla, short-form mortgage that isnt
more than two pages long; however, when
Im asked by a lender to assist in preparing a
mortgage, that mortgage is a much longer
and more detailed document. Yes, I realize it

costs a little more money to have it recorded

on public record, but the terms contained in
that mortgage are much more beneficial to the
party for whom Im working. When Im
preparing a mortgage for the title company, I
have to be as neutral as possible. In those
instances, its clear to me that its a classic
example of neither party really understanding
the terms of what they are doing. They all
need to understand that Im just following the
terms as set forth in the purchase and sales
agreement that has been delivered to the title
company, and I have no fiduciary duty to
either party.
Remember this one thing. Make sure you
understand the terms of the deal, and
whenever possible, make sure YOU are
controlling those terms.

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.

VISIT

MAREI.org
CLICKON

business
associates
RE INVESTMENT NEWS

DIRECTORY

BUSINESS
ASSOCIATES
Find out more about each of these associates by visiting
their website.
Or go to MAREI.org and click on Business Directory.

10

AZURE WATERFRONT
Luxury Waterfront Property Investment
Brad Reddick
www.AzureWaterfront.com
800-240-3606

ACCURATE TITLE

AZURE CARPET CLEANING

A Full Service Title Company

David Green
www.AccurateTitleCo.com
913-338-0100

Carpet, Hardwoods & More

Jerry Myers & Tiffany Krout
www.AzureCarpetCleaning.com
816-668-0258

ALPHA TITLE

BRIDGE MANAGEMENT

Full Service Title Company

Patsy Archer
www.AlphaTitleLLC.net
913-498-8999

A Turn Key Real Estate Experience

Nathan Brooks
www.BridgeEquity.com
913-695-8213

ANDERSON & ASSOCIATES

CONTINENTAL TITLE

Law Firm
Julie Anderson
www.MOKCLawcom
816-931-2207 / 913-262-2207

A Full Service TitleCompany

Sharon Bower
www.CTitle.com
913-338-3232

APIA

CROSSROADS INVESTMENT LENDING

Asset Protection Insurance Agency

Lindsay Griffin
www.APIAProtects.com
877-752-2742

Investor Lending
Britton Asbell and BarakTschirhart
www.KCLend.com
913-766-2900

MAREI.ORG

DIRECTORY

DISCOVER HVAC

KCMO HOME BUYER

Heating & Airconditioning

Complete System for $2785
www.DiscoverHVAC.net
816-500-2900

Property Buyer
Don Tucker
www.kcmoHomeBuyer.com
816-200-2198

GUARANTEED RATE
First Digital Mortgage
Beth Langston
www.GuaranteedRate/com/BethLangston
913-225-9323

HOME RENTAL SERVICES

KC CABINET COLLECTION
Cabinet Source
Mark Yanda
Website Coming
913-980-4260

MERCHANTS MORTGAGE

Kansas City Property Management

Sandy Fisher or Paul Branton
www.Home4Rent.com
913-469-6633

Real Estate Finance Company

Susan Aubin
www.MerchantsMtg.com
720-554-9480

INVESTORS CHOICE FUNDING

PRIDE PROPERTIES

The Flexible Funding Solution

L. Scott Ficinus
www.InvestorsChoiceFunding.com
816-668-7223

Real Estate Professionals

Marcus and Matt Bray
www.PrideProperties.com
913-213-5370

JAMIESON HOME TEAM

REAL PROTECT

Realtor & Property Management

Kevin Jamieson
www.KevinJamieson.ReeceNichols.com
913-384-8331

Insurance for Investors

Brought to you by National REIA
www.RealProtect.com
1-800-579-0652

KC INVEST

REALTY RESOURCE

Investment Property Seller

Kim Tucker
www.KCInvest.com
913-735-0018

Real Estate Brokerage

Scott Tucker
www.RealtyResourceKC.com
816-406-0701

RE INVESTMENT NEWS

11

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