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April Minnesota Real Estate Investors Association, Inc.
Issue 64 1
2010 www.MnREIA.com
Isn’t Technology Great?... LOL
Circulation 3,500 Monthly & Growing
By Mike Jacka, Weekly Trainer on www.RealEstatePromo.com
Remember back in the days when it was cool to And today a whole new generation of training is
In This Issue: have a fax machine? Yeah I know, they never worked coming into existance.
properly, but you still needed one so that you could
fax your offers. I don’t know how many times I got Online webinars are now all the rage, and that
• Isn’t Technology so frustrated with the fax machine that I still ended has only becomepossiblebecauseof technology.
Great?... LOL up jumping in my car and driving the PA (Purchase For example, I teach a weekly training class
- Mike Jacka Agreement) to the listing agent’s office. for beginning and seasoned investors online
Creative Real Estate Monthly
using GoToMeeting. This is simply an amazing
• Q&A - Mike Jacka Can you imagine physically driving to someone’s technology. You can sit at your computer, in
office today, just to deliver a PA? We don’t even use your PJ’s at 7 pm every Monday night with a
• QuickBooks 2010 fax machines anymore, all PA’s are sent via email cup of coffee or a night cap and learn more in
- By Ronald Aho now a days. Heck, all confirmations, rejections that hour than you could have if you had spent
and counter offers are emailed these days. 2 days traveling, 3 nights at an expensive hotel,
• The Return of the Communications have become instantaneous, and renting a car and spending 5 times the normal
“Contract for Deed” to make it even quicker to communicate, a whole amount on food for the weekend, all the while
Look Out Usury! new language is currently being written. Some of your butt is so sore from those uncomfortable
- By Tom Fafinski the messages I get are so unreadable that I end up metal chairs that you can’t even focus on what
LOL. “LOL” for those of you who don’t already know, the speaker is talking about because you are so
• Market Update stands for “Laughing Out Loud”. fatigued and sore.
• Think You Don’t Have Business these days is changing at such a rapid pace On our webinars however, you can relax, heck
Enough in Your because of technology. While we learn to adapt to you can even take your laptop and lay down on
Account For Real these changes, it can be very frustrating. I sometimes the couch while I teach. You can download the
Estate? think that the only reason people get into real estate evening’s worksheets to take notes and follow
- By Todd Grill is because they are afraid of technology and are still along with the topic. You can even ask what
old school. The problem is, if you are going to run ever questions are on your mind at anytime
• Next Monthly Meeting a business, you need to embrace technology and during the webinar and no one will tell you to
learn to use it to your advantage, being mindful that hold your questions till the end. I answer all the
others are doing exactly that. questions as they come, and I will even stay on
the webinar for hours answering your questions,
Let’s take a look at a simple example that everyone if that is what it takes.
can relate to such as how cell phones have come
a long way. When they first came out 20 years These webinars are very interactive, and all you
ago, they were big clunkers and needed to be need to join a webinar is a computer and hi-
plugged into the cigarette lighter in your car to speed internet. I think almost everyone reading
Monthly Meeting: work. But they would only work if you were near this meets those two requirements. But the
1st Tuesday of Every a cell tower. Today cell phones are so small that fit best part of webinars is that we can record them
in your pocket, the batteries last for days, you can and you can watch them again tomorrow, just
Month
surf the net, navigate with the built in GPS, find a in case you missed something really important
7pm - 9pm restaurant serving whatever suits your fancy along while you were busy taking notes or your phone www.MnREIA.com
with customer reviews that were written 5 minutes rings.
Registration at 6pm ago and you can use them in some of the most
Radisson Hotel remote locations on the planet, except for in your Here’s a MUST HAVE for all real estate investors,
basement, in your office or anywhere else that you a Website, which is your 24/7 salesman. In
Roseville
really need the phone… LOL today’s environment, everyone you do business
2540 North Cleveland with will want to see your website, and if
Technology has even changed the way we learn. 20 you don’t have one, you are probably losing
Roseville, MN 55113
years ago you had to go to the library or book store business without even realizing it. Fortunately
For Directions Call: to find information on real estate investing. 10 years for you, technology has even made this a simple
ago you had to travel to distant locations for book process for you. For example, at my website
651-636-4567
camps, workshops and seminars to get the most www.RealEstatePromo.com, all our members
Questions? current and up to date strategies. 5 years ago you have a website that we have created for them
could research what you were looking for online and a series of “How To Videos” to walk you
Call Our Office:
and buy a home study course on eBay for a fraction through the process of setting up your website,
651-779-6446x0 of the cost the person who is selling for paid for it. (Continued on page 6)
Minnesota Real Estate Investors Association, Inc. Issue 64
2
www.MnREIA.com
Ask The Expert Q
By Mike Jacka &A
Q I’ve come to terms with the fact that I need a
website to increase my exposure and generate
leads, why shouldn’t I just have a webdesigner
just make one for me?
A There are a lot of good designers out there, but
real estate websites are in a class of their own.
First, webdesigners want to make the project
Minnesota Real Estate Investors Association, Inc.
as big as possible so they can set themselves up
for more work. So they’ll insist that any good
website is going to have this, this, and that but
Circulation 3,500 Monthly & Growing
these extra additions can actually be detrimental
to the goal of your site. It’s important to note
that designers typically don’t have a clue how our
business works and what our business requires.
A real estate site shouldn’t have a bunch of links,
feeds, and whistles because it distracts from the
original purpose... generating the lead. We’ve
been using our sites actively in our real estate
and have learned from trial and error over time
and there is no way a designer is going to be able
to grasp REI concepts properly enough to build
you the kind of site you require. We recommend
you go with the sites provided to you by our sister
company www.RealEstatePromo.com
Q I don’t understand why I really need a website
when I can just use my bandit signs, flyers, and
print advertising that’s worked in the past...
A What you need to understand first is the enormous
shift in the environment and how people seek
information. The internet has provided an
incredible source for people to obtain information
whenever they please from wherever they are.
Why call off a bandit sign when you can simply
write down a webaddress and look it up? To the
prospect the path of least resistance is the most
travelled road. If someone refers someone but
all they have is a number that little fear of calling
a stranger exhibits resistence. If someone passes
along a website to check out where they don’t
have to make a cold call and can get what they’re
looking for the odds are much greater they’ll act
Submit Your Questions online @:
www.MnREIA.com/Questions
Issue 64 Minnesota Real Estate Investors Association, Inc.
3
www.MnREIA.com
QuickBooks 2010 Real Estate Trivia
By Ronald Aho Where is the largest house in the world located?
www.TheBusinessAdvisors.com Answer: In Next Months Issue
Last Months Trivia:
What is the difference between a S Corporation
What’s New? and a C Corporation?
QuickBooks has substantially upgraded both its Premier and Pro Answer: When you create a Corporation, it is by
versions. The Company Snapshot in QuickBooks 2010 can now be
default a “C” Corp. “C” corporations have their own
modified. In addition, two problems in previous versions have been
solved. First, in only a few steps, you can now add or edit multiple tax structure and file their own taxes. To create an
customers, vendors, services, inventory items, and non-inventory “S” Corp, simply make the election to become an
items. Second, you can easily copy and paste Excel list data into “S” corporation when you are filing with the state.
QuickBooks.
Minnesota Real Estate Investors Association, Inc.
“S” corps have most of the same benefits of a
“C” corp, but the tax reporting flows over to your
Intuit has also revamped QuickBooks’ reporting tools so they’re
easier to find and open quickly. You can choose between list, grid, individual returns.
Circulation 3,500 Monthly & Growing
and graphical carousel views, and tab quickly among memorized,
favorite, and recently viewed reports. You can also now add an
electronic signature to checks you create and print in QuickBooks.
It’s easy; you simply go into the printer setup tool and designate
the correct graphic file. Intuit Check Solutions can help you get
paid faster. Instead of bringing incoming checks to the bank, you
can either scan them or take the information over the phone,
and then transmit the financial data to the bank. The setup fee is
$59.95 with a monthly fee of $19.95 and 23-cent charge per check
transmission.
The 2010 QuickBooks upgrades have enhanced prior year versions
substantially.
QuickBooks 2009 Alert!
There have been problems with QuickBooks 2009 releases R9P to
R11P. If you have upgraded with these releases, you may have some
stability issues with the program. We have seen this with some of
our clients. If you have not upgraded past R8P, then you should
not have any problems. We have found that the program will close
for no apparent reason and when portable files are sent by e-mail,
they are not opening. QuickBooks has solved these problems with
its 2010 versions. I would seriously consider upgrading to 2010
because I am not convinced that the QuickBooks 2009 R8P and
prior releases are stable.
Minnesota Real Estate Investors Association, Inc. Issue 64
4
www.MnREIA.com
The Legal Corner
With Tom Fafinski
TFafinski@VirtusLaw.com
The Return of the “Contract for Deed”
Look Out Usury
During difficult economic climates, it may be difficult to obtain
traditional mortgages. The rules have changed and institutional
lenders have become very conservative. This has led to the
return of seller financing. Buyers (investor and home owners) Mortgage Association posted yields on 30 year mortgage
are turning to an old friend – the contract for deed. A contract commitments for delivery within 60 days on standard
for deed is a cross between a mortgage and rental agreement. conventional fixed rate mortgages published in the Wall Street
Minnesota Real Estate Investors Association, Inc.
It allows the seller to keep the legal title of the property Journal for the last business day of the second preceding month
until all installments of the “mortgage” payments have been plus four percentage points, currently 8.8% [different interest
made. That said, buyers can enjoy the benefits of depreciation rates apply to land and timeshares].
Circulation 3,500 Monthly & Growing
deductions and gain immediate possession of the property. For
the seller/holder of the contract for deed, the transactions are When entering into a transaction, make sure, the terms of the
normally quicker and, in the event of a default, offer a speedy contract are laid out clearly so that both the buyer and seller
turn-over of the property when compared to foreclosing on understand all aspects of the agreement. If the transaction
a mortgage [although not as quick as a lease with an option falls within the usury laws, make sure that the interest rate
generally]. [the statute includes more than just the stated interest rate
in the calculation] is compliant with the statute. Often a
There are, however, traps for the unwary in a contract for balloon payment is included in the contract; the seller should
deed for the seller which need to be considered prior to be aware of this and find out if the buyer will be eligible for a
consummating a transaction. A contract for deed transaction mortgage at the time to cover this payment. Third, the buyer
can be subject to usury laws. Usury is defined by statute and should make sure the seller is the legal owner of the property
seeks to prohibit high interest rates in certain transactions. In by checking with county records, etc. With this the buyer must
the past, usury has not been of major concern in Minnesota also make sure their payments are, indeed, being paid toward
because transactions involving $100,000 and real estate to the mortgage and not being kept by the seller for personal
were exempt from usury laws. However, in August of 2008, profit. The buyer can find themselves in full performance only
the threshold for usury laws was raised to $300,000. That to learn that the seller has not made a payment in months and
means that transactions involving real estate contracts under months.
This article was drafted by Thomas Fafinski, an attorney
$300,000 are subject to usury laws. Only a seller can be found
with Virtus Law PLLC, with thanks for the contributions
to guilty of usury and if this happens in a contract for deed
by Katie Kjos, assistant. Thomas can be reached at
setting, the interest of the contract is void and the buyer can
tfafinski@virtuslaw.com
recover 5 times the usurious portion of interest plus attorneys
fees. main office: 7040 Lakeland Ave, Ste 111 Sheraton Office
Bldg, Brooklyn Park, MN 55428
Minnesota Statutes, Section 47.20 sets the maximum lawful satellite office: 1191 Northland Dr., Ste 175, Mendota Hts,
interest rate at an amount equal to the Federal National MN 55120; cell: 612.865.1700; direct: 763.432.6081;
main: 763.432.2169; fax: 763.447.3591
Issue 64 Minnesota Real Estate Investors Association, Inc.
5
www.MnREIA.com
Market Update
Pending Sales
As of March 15th, 2010
Minnesota Real Estate Investors Association, Inc.
Circulation 3,500 Monthly & Growing
Supply – Demand Ratio: ▼
Decreased from 6.99 houses for sale per buyer in February to 5.39 in March
Median Sales Price: ▲
Increased from $157,000 in January to $159,000 in February
Average Sales Price: ▼
Decreased from $195,902 in January to $193,429 in February
Pending Sales: ▲
Increased from 2,736 in January to 3,527 in February
Closed Sales: ▲
Increased from 2,001 in January to 2,157 in February
New Listings: ▲
Increased from 6,598 in January to 7,165 in February
Percent of Original List Price Received at Sale: ▼
Decreased from 92.8% in January to 92.3% in February
Minnesota Real Estate Investors Association, Inc. Issue 64
6
www.MnREIA.com
(“Isn’t Technology Great?... LOL” Continued from page 1)
getting a domain name, how to upload photos of properties and the
whole enchilada. We even have “How To Videos” to show you how to
create a digital flyer to post on craigslist, how to use Google Analytics to
track visitors to your website and where they are coming from. We are
constantly adding new “How To Videos” to the library, with trainings that
would cost you $1,000’s elsewhere.
Most of my advertising these days is also done online at places like www.
RealEstatePromo.com, www.Cragslist.com, www.kijiji.com and www.
BackPage.com. Networking is also huge online these days with www.
FaceBook.com, www.Twitter.com and www.Linkedin.com. I can read
my emails and respond to them when I am on the road through my
phone. I can take pictures of a property and upload them to my website
from the very same phone, and I can even search the MLS when I drive
Minnesota Real Estate Investors Association, Inc.
by a property just to see what the asking price is and what the comps are
in the area. Can you imagine how we did all that 20 years ago without
technology?
Circulation 3,500 Monthly & Growing
The cool thing is that I use technology to teach people how easy it is to use
technology for their own business. I even provide you with the technical
tools that you need to learn and run a successful business while teaching
you how to use them. And because technology has advanced so much
in the last 20 years, the cost to use these tools is now so affordable that
you cannot afford to be without theme.
So what’s the next step? Register for a FREE account at www.
RealEstatePromo.com, if you don’t already have an account (MnREIA
Members already have an account, contact our office for your login info).
Setup your FREE website and watch the “How To Videos”. Register for
the next Monday night Training Webinar from your “My Account” home
page and most importantly, ask your questions on the webinar!
Mike Jacka is the president and found of MnREIA who has
been an active investor for over 18 years. In addition to his vast
experience he is also well known as a pioneer in applying the
advantages of technology to our industry. Follow Mike on his
blog at www.MikeJacka.com!
Issue 64 Minnesota Real Estate Investors Association, Inc.
7
www.MnREIA.com
Think You Don’t Have Enough In
Your Account for Real Estate? Call 763-559-5636 and Ask How Todd
Can Set Up Your Land Trusts and
By Todd Grill Solve Your Trustee Needs!
www.TheEntrustGroup.com
We receive many calls from clients and prospective clients real estate investors can take advantage of this with
who want to have their money working for them in real great success.
estate or real estate related assets but think they dont have
enough in the account to really make it work. A third possibility is to “buy” a house subject to the
existing mortgage. There are numerous classes on
Frequently, that’s a big misconception! this available through your local Real Estate Investors
Association, and it’s too complex to cover in detail
There are several investments available to the relatively small in this article. However, the concept is that you find a
account – if you know where to look for your investors. motivated seller looking to quickly exit their property
Minnesota Real Estate Investors Association, Inc.
and you take title to the property “subject to” the
For the purpose of this article, I define small as less than existing mortgage. Title to the subject property is
$25,000.00. Although there are still plenty of areas of the transferred to the IRA and the IRA holder agrees to pay
Circulation 3,500 Monthly & Growing
country where this will buy real estate outright, it’s generally the existing mortgage from the funds in the IRA. hen
not enough in the hottest markets today. There’s still plenty of your funds are in a Self Directed IRA, such as Entrust
opportunity in these markets, however, for you to make that Midwest, you are all set to make a purchase offer on a
money work for you harder than it would on Wall Street. piece of property. Let’s say you find a 5-acre parcel on
the shore of a beautiful lake, and you want to make an
One good possibility is for you to loan money from your IRA offer. You work with your broker to draw up a purchase
to an investor seeking rehab funds for properties they have offer in the name or your IRA. Be sure to sign the offer
purchased. You can loan money at a fixed interest rate or to indicate that you have reviewed and approved it.
create an equity participation note where you will share
the profits when the property sells. In some markets, these For information on setting up a self-directed IRA or
returns can be dramatic. Land Trust & Trustee services call 763-559-5636
Additionally, you can secure the note with the real estate to
be rehabbed providing even more safety for your investment.
Another possibility is the use of the Purchase Option on a
property. While options generally require a more thorough
understanding of the local market you are working in, if used
correctly, they can produce a great return on the investment.
Here’s how it works – you locate a property that you believe
is undervalued in the market. You negotiate with the seller
and they accept your option to purchase the property within
X number of days at a given price. The option is issued to
your IRA and the option consideration fee is paid from it as
well.
This option is recorded at the courthouse to secure your
position on the property. You then put your marketing
skills to work to sell the property at the price you believe is
appropriate. When you’ve found a willing buyer, they must
pay your IRA the difference between the two selling prices
in order to clear title at the courthouse and proceed with a
closing on the property. The downside to this is that if you
are unable to find a willing buyer within the days specified in
the option, it expires and your IRA loses its consideration fee
paid to the owner. Like I said, this requires a more thorough
understanding of the market you’re working in, but seasoned
PRSRT STD
Minnesota Real Estate Investors Association, Inc. • 2675 Stillwater Road • Maplewood, MN 55119 The Final Word From Mike U.S. POSTAGE
Take Your Marketing PAID
Messege Online! NAMEBANK
Since we started providing
the FREE Websites and
Weekly Training at www.
RealEstatePromo.com we have been learning
a lot about online marketing. On the training
calls not only have I been sharing ideas with the
students, but they have been sharing ideas with
me. Together we have all been generating some
pretty good results for free or very low costs.
With all the changes in technology these days,
online marketing is finally a viable solution,
and with the free websites through www.
RealEstatePromo.com, you can’t afford not to
try it.
Mike Jacka, President of MnREIA
www.MikeJacka.com/Blog
Minnesota Real Estate Investors Association, Inc. Issue 64 April
Circulation 3,500 Monthly & Growing - www.MnREIA.com 2010
MnREIA Next Month’s Meeting:
Creative Real Estate Monthly
Tuesday, April 6th: Using Technology to Simplify
Registration Begins at 6pm Your Real Estate Business
Meeting Kicks off at 7pm! With Mike Jacka
Investors who are grasping technology today are setting themselves up for the future. Don’t
risk falling behind the curve. Invest in making the MOST out of your time with technology!
It’s really to you learned:
• Why you need a presence online • Ways to drive traffic to your site
• Importance of picking a proper domain • How to convert traffic into leads and convert
• What an investor website IS and ISN’T them into deals!
Whether you’re for or against technology you have to admit that the importance of the internet
in real estate and business as a whole is only going to grow. There are so many aspects that
pertain specifically to real estate investing that it is something to you’re going to have to learn
because others who aren’t investors just won’t get what you’re trying to do. Tuesday we will
pull you up into the know and layout everything you need to stay up-to-date!
Membership Benefits: Upcoming Meetings:
• Monthly Meetings
• Free Trainings • Every Monday: Weekly REI Training *Webinar* -Mike Jacka
• Archives of Past Meetings • April 10th: Tom Fafinski, Todd Grill, Todd Rooker, & Mike!
• Members Only Discounts *FREE Full Day Saturday Workshop!*
• Networking/Education • April 14th: Cashflow 101 Game Night in Bloomington
• Real Estate Leads
To participate just go to MnREIA.com and Click on the Event!.
• Advertising Discounts
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