“Landlords Helping Landlords” NWCLA · best landlords that we can be! Laura’s e-mail is . [email protected] or mail her stories to: NWCLA, ATTN: Laura Schmidt, P.O

NWCLANorthern Worcester County Landlord Association

“Landlords Helping Landlords”“Landlords Helping Landlords”

1

www.nwcla.com

Volume 57 July–August 2009Landlords Helping Landlords

NWCLA President’s Summer LetterDear NWCLA Membership,

As we get ready to roll out a new season of NWCLA meetings I look back to the last few months and have to ask myself, “Where has the Summer gone?” Our last meeting in June featured law enforcement officers

from the State Police Crime Control Unit as well as officers from the Fitchburg Police Department.

As always, we want to thank the State Police for presenting their findings of crime activity in the our communities and throughout Massachusetts, and also wish to thank the Fitchburg Police officers who came in to talk about the recent changes in the department. Unfortunately, Fitchburg, and all of Massachusetts has been hit by budget cuts, and recently has had to lay off even more officers at a time when the poor economic condition opens the door to higher crime activity. However, we were shown ways that we can still protect our properties, our neighborhoods, and take advantage of the new Fitchburg Police web site where we can anonymously submit complaints, disturbances, and request police assistance at our buildings in the Fitchburg Community.

The Fitchburg Police Web Site can be accessed online at http://www.fitchburgpolice.com/ and features a link from the home page to a form to report suspicious activity in your neighborhood, submit an anonymous tip, or contact the current officer on duty. This service is NOT intended to relay Emergency Information. In the event of an Emergency, you would still dial 9-1-1 for immediate assistance. This online service is for non-emergency situations only.

The web site also has links to other forms and services such as: Alzheimer’s Alert, House Checks, Firearm Licenses Instructions, Citizens on Patrol, Citizen Police Academy, Private Property Towing, Domestic Violence/Abused Person, Motor Vehicle Crash Report, Firearms Change of Address, Report of Drug Trafficking, Personal Criminal Record Request, Toys-for-Tots, Request For Sex Offender Information, and Criminal History Record Request.

The Fitchburg Police online web site also features information about crime statistics, community alerts and other useful information to protect and serve the communities we live and operate in.

Our NWCLA Fall meeting season kicks off September 10th, 2009 with a visit from Jamie R. Williamson of the Massachusetts Fair Housing Center. The Massachusetts Fair Housing Center will be providing our members with a fair housing training course. In this open session we will learn how to pre-screen tenants fairly, avoid the pitfalls and mistakes made in our advertising, be aware of what can be discrimination. Come down to test your knowledge and see if you are doing things right.

Just a few meeting reminders to get us back into the swing of things. We are still making non-perishable food donations to Ginny’s Consignment Shop on Mechanic Street in downtown Leominster right over the railroad tracks. Your generosity in these tough times is greatly appreciated by those of us who are less fortunate. If you can’t attend the meetings, you can still drop off your donations and say “Hello” to Ginny in person.

Also when attending the meetings at Monty Tech, please do not park along the back corridor where the buses are parked, or take a handicapped space unless you have the proper parking sticker to do so. Parking is behind the Dukakis Performing Arts Center. You may also park near the main entrance in the front of the building and walk to the Tea Room down the hall by taking a right as you enter, then a left down the hall to the rear of the building. See you in September.

Sincerely, Brian LucierNWCLA President 2009 – [email protected]

In This Issue Page President’s Letter 1

NWCLA Useful Notes 2 NWCLA Members’ Sponsor Testimonial Program 2 Upcoming Topics, 4 BUY-SELL-TRADE-FREE 4 Massachusetts Property Values: An Appraiser’s Outlook 5 - 8 Web Site: http://www.coupons.com/ 5 Housing market showing signs of life 6 Short Sale Seller Caution 7 What is a self-directed IRA? 9 - 10 14 Ways to Make Money in Real Estate 10 NWCLA Spotlight Sponsors 11 Schmidt’s Smorgasbord 12


www.nwcla.com

NWCLA Membership $80 Membership Benefits Include:• Monthly NWCLA Newsletter• Local Drug Arrest List • Housing Court Eviction List• Member to Member Support• Informative Monthly Seminars• Association Attorney• Legislative Updates• E-mail Alerts on Housing Issues• Web Site - www.nwcla.com• NWCLA Blog posts at

www.realestateinvestor.com

2

PresidentBrian Lucier [email protected] Vice PresidentDebbie Greelish [email protected] TreasurerTina [email protected]

Secretary/ClerkTheresa [email protected]

Membership DirectorBrenda [email protected] Newsletter DirectorRick Dupuis [email protected]

Welcoming CommitteeTheresa [email protected]

Marketing DirectorLaura Schmidt [email protected] Web Site DirectorBrian Lucier [email protected]

Oil Program DirectorJay Johnson [email protected] Food CommitteeLaura Schmidt [email protected]

Program ManagerJeff Landry [email protected]

Legislation DirectorJamie Merrill 978-407-7174 [email protected]

Board MemberMatthew Moore 978-345-7971 [email protected]

Board MemberRon LeShane Jr. [email protected]

Board MemberJay Johnson [email protected]

NWCLA Board Members “NWCLA – Landlords Helping Landlords”

We are proud to serve the following communities:Ashby Ashburnham Athol Clinton

Fitchburg Gardner Harvard Hubbardston

Lancaster Leominster Lunenburg Phillipston

Princeton Sterling Townsend Westminster

Winchendon

P.O. Box 276 – Fitchburg, MA 01420 – 978-345-1887 – http://www.nwcla.com

NWCLA Members Testimonial Program Every month we are going to extend to you an opportunity to highlight the positive experi-ences you’ve had with any of the vendors in our newsletter. Please take a moment to e-mail me a few words describing the work that was done for you and the name of the contractor who completed the job. Your affirmative input will let other property owners in our group know that working with our advertisers can be a positive experience. This is also a great way to say “thanks” to the business men and women who contribute to the Northern Worcester County Landlord As-sociation and our goal of being the best landlords that we can be!

Laura’s e-mail is [email protected] or mail her stories to:NWCLA, ATTN: Laura Schmidt, P.O. Box 276, Fitchburg, MA 01420

NWCLA Useful Notes• Summary Process Summons &

Complaint Forms are available for $5.00 NWCLA meetings

• The newsletter committee needs you to E-mail your stories, ads, helpful hints, to [email protected]

• The Successful Landlord is avail-able to purchase at our meeting. Cost is $40.00. While supplies last

• Anyone seeking past eviction lists please go to our web site to download the latest copy.

24-Hour Heating & Plumbing Emergency ServiceFREE Estimates • Residential & Commercial Work

Senior, Active Military AND Volume $$DISCOUNTS$$Pre-Pay & Budget Plans • Online Bill Payments • Energy Saving Products

A Local Family Owned & Operated Business

Heating Oil • Diesel • Winter Blends

Full BURNER ServiceFull PLUMBING ServiceFull AIR CONDITIONING Service

“Why Make More Than ONE Call?. . .When COUNTRY FUEL Does it All!”

212 West St., Gardner, MA978-632-1100 • 800-995-6395

MA LIC #10588


http://www.realestateinvestor.com/groups/69/Start your own FREE NWCLA Blog discussion

You have the right to choose the LOWEST COST Eviction Mover / Public Warehouser

See our web site at:www.evictionmover.com for information and licensing or call

1-617-966-6684

DON’T GET RIPPED OFF!

NWCLA MEMBER DISCOUNTS

Aubuchon HardwareGroup # 1000501 – Membership card required

20% off Glidden paint 10% off merchandise

Grand Rental StationCash Acct. # *195 – Membership card and

Photo ID required 10% off

Maki’s Building Center Cash Acct. # *195 – Membership card and

Photo ID required 2% - 10% off

Sabourin HardwareMembership card and Photo ID required

Advanced Electrical Contracting 10% discount for any job above $125 for members

Quality Drywall 10% OFF to NWCLA members

3

Please Note: The information in this newsletter is not intended to be construed as legal, accounting, or other professional advice. Seek legal advice from licensed professionals for answers relating to your particular questions and circumstances.

Michelle Schmidt Realtor Cell: 978-828-0817 Email: [email protected]

“Call me today!

I’m glad to help with allof your real estate needs!”


www.nwcla.com

FOR SALE 2 Stoves 2 Refrigerators1 Washing Machine1 3-bay metal sink1 plastic utility sinkGreat for your apartments! Starting at $100.00Call Tim Damon @ 978-297-5254 __________________________ http://www.forrentorsale.net/ 3 different Ken Roberts training videos, and tapes complete with the manuals. Call Mark @ 978-502-5723 or e-mail: [email protected] __________________________NEW, sliding glass door unit for a 4 foot tub enclosure. Hard to find. Paid $200., Will sell for $100. Call Marria @ 978-534-5982 ___________________________ 1.) Used HP MX.70 17 inch desktop monitor color grey apx 4 yrs old not used for 2. Complete with box manual, pwr cord Excellent condition like new.Asking $65.00 or BO. First $50.00 takes it2.) Also have HP 845c color ink jet printer (grey) excellent condition like new with pwr adapter, no ink. Asking $35.00 or Bo. First $25.00 takes it.

Will sell all items above for $75.00 cash. All items are in working order and sold as is. I have all boxes; will deliver for slight fee w/i 30 mile radius of Fitchburg. These are my sons units - I need the room, he needs the money. Call Ken @ 978-342-0639 or e-mail: [email protected]___________________________36” x 80” outside door, hardwood with 6 windows, with frame. Dead-bolt lock included. $50.00 or BRO call Ken Anderson at 978-534-9533 or 508-641-1559 ___________________________ 3 COLOR MONITORS!!! 19”& 20” VIEWSONIC Each in excellent condition. Left overs from recent professional graphics studio upgrades. Asking $80 each or BRO call Brian at 978-448-3873 or [email protected].

REAL ESTATELOOKING FOR INVESTORS!!!Seasoned real estate investor seeks other like-minded investors to partner on large apartment complexes. Call Brian at 978-448-3873 for more information or e-mail. [email protected] ___________________________Looking for Property in Gardner, Leominster, Athol Areas. Any and all calls welcome for 10+ multi-family units. Have financing approved and ready to go. Call 978-448-3873 and mention this ad from the NWCLA Newsletter for more information. Ask for Brian. [email protected] ___________________________Time-shares Available For Rent in Aruba, Florida, Las Vegas. Any and all calls welcome 978-448-3873 and mention this ad from the NWCLA Newsletter for more information. Ask for Brian. [email protected] ___________________________Ad listings are free to members. There are three ways to submit your ad: (all ads are subject to review and editing)1.) Bring your classified ad(s) to the

meeting and post on the bulletin board

2.) E-mail your classified ad(s) to: [email protected] 3.) Mail your classified ad(s) to:

Attn Terry NWCLA PO Box 276 Fitchburg, MA 01420

a.) State classification – Wanted, For Sale, Free, etc.b.) Describe the item – color, size,

condition, age, model number, price, etc.

c.) Contact name – first and last name please (must be NWCLA member)

d.) Contact information – telephone and or e-mail address

All ads subject to space limitations in our newsletter.

BUY-SELL-TRADE-FREE

4

NWCLA Program Schedule 2009 Sept 10, 2009 The Massachusetts Fair Housing Center

will be providing our members with a fair housing training course.

Oct 9, 2009 Topic To Be Announced

Nov 13, 2009 Topic To Be Announced

Dec 9, 2009 NWCLA Holiday Gala Party Event Make sure to bring unwrapped toys and non-perishable food items


http://www.realestateinvestor.com/groups/69/Start your own FREE NWCLA Blog discussion

Useful Web Site of the Month http://www.coupons.com/How does Coupons.com work? Using Coupons.com is simple. Just follow these steps and you’ll be on your way to saving on things you use every day. Just visit the gallery of Printable Coupons, click on the offers you’d like to print. It’s quick and easy to scan through each page of offers. Once you’re done selecting offers, make sure your printer is on. Then click the “Print” button on coupons.com. Take your coupons to the store and save. That’s it!

5

NWCLA Members – Did You Know?... That Legislation Director Jamie Merrill has been tracking pending legislation that effects all of us as land-lords including helping members deal with out of town landlords? Be sure to visit the Legislation page on the NWCLA Web Site for this information and more related legislation topics. Take Action!!! http://www.nwcla.com/

Massachusetts Property Values: An Appraiser’s Outlook And Predictions On Future Massachusetts Property Values

What Happened? The Last Three Years

The Massachusetts real estate market was artificially stimu-lated by forces outside the normal supply demand model. This led to artificially increased values, mostly at the lower end of the value range in communi-ties at the lower end of the income range.

Once the stimulation was terminated, around 2006, and market forces returned to normal, the correction process began. The Massachusetts market has to absorb all of the artificially induced value, before it can start to act in a normal supply demand model. Any particular property will be affected by the market that it is in, therefore to answer the question, “How much has my property value declined?”, look at the community it is in, and the location of its value in the community’s range of value, i.e. low medium and high. In general a high end valued home in a community with high incomes will see little to no loss, while a low end valued home in a community with low income will see high declining value.

Most communities will continue an upward trend in average value. The upper end in both markets will continue to feel the pressure of the recession and tight credit for 12-18 months until the recession’s negative effects are mostly dissipated and we have moved into a strong growth mode. Properties at the low end of the value range in all communities will wait a long time to attain the values seen in 2006.

The Broad Strokes

In general, decline in real estate value is a result of an imbalance in supply and demand. More sellers than buyers, cause reduced prices. If possible sellers wait, hoping the market of Massachu-setts Property Values will improve.

The Impact of the Sub-Prime And Credit Cri-sis On Massachusetts Property ValuesThere have been many articles written describing the sub prime mortgage market in relation to the collateralized mortgaged backed security market. For our purposes I will simply state that the effect was to increase demand for real estate, mostly at the low end of the value range. I say the low end because the goal was to bring marginal buyers into the market by lowering the bar for qualification for a mortgage.

This did not affect the middle and upper income value ranges in Massachusetts as much, since high income earners were already in the market. However, there was an “upsurge effect.” When a low value owner sold for a profit, they moved up to the middle market, creating a secondary effect on the middle and upper markets.

From 2003 to about 2006 we can document an upsurge in Mas-sachusetts property values, which we attribute to the excess demand entering the market during this period.

Story continued on Page 8


www.nwcla.com6

Housing market showing signs of life: Industry ex-perts see indications that the local housing market is starting to stabilizeBy Steve AdamsThe Patriot Ledger

NORWELL —

Signs are multiplying that the Bay State real estate market is no longer in a free-fall. Condo prices have risen 35 percent since January to $275,000, and condo sales have risen for five straight months, the Massachusetts Associa-tion of Realtors reported this week. June home sales rose 39 percent from May’s levels, while median prices rose 6 percent.

With widespread job losses and another possible wave of foreclosures on the horizon, few industry experts are declaring an outright recovery, and sales activity typically increases through the summer due to seasonal home-buying patterns.

But some see signs that the worst of the meltdown has passed.

“It is absolutely beginning to tip back toward a seller’s market in Greater Boston with huge gains in Middlesex

and Norfolk Counties,” said J.T. Price, vice president of Norwell-based Hous-eSavvy USA.HouseSavvy USA says the Greater Bos-ton market bottomed out in January and sales have since risen 105 percent in six eastern Massachusetts counties.

Industry insiders cite several reasons why the market could be stabilizing.

Inventories of unsold homes are steadily declining. First-time home buyers can qualify for an $8,000 federal tax credit if they close on a property by Nov. 30. And lower prices are luring more entry-level buyers back into the market.

The pace of year-over-year price declines is slowing. After declining by double-digits for eight of the last nine months, single-family home prices fell just 4.9 percent in June, The Warren Group of South Boston reported this week.

Sellers are lowering their asking prices after resisting for much of the last two years, said Rita Coffey, president of the Plymouth and South Shore Association of Realtors.

A three-bedroom Cape in Braintree originally listed at $599,000 in January 2008 was later reduced to $519,000, but failed to generate a sale.

After taking the property off the market, the homeowner relisted it last month for $449,000. It sold the next

day.Richard Cahill, president of Norwell-based Jack Conway & Co., said people whose home prices appreciated rapid-ly in the first half of the decade resisted listing them at reasonable prices as the market deflated.

“They just couldn’t get themselves to realize, even though that wasn’t real money, that their house is now worth much less,” Cahill said.

Industry reports for the month of June reflect many deals that were struck earlier in the spring, since transactions typically take about two months to close. But real estate agents say offers – at least on lower-priced homes – have remained brisk since then.

Inventories of unsold homes have been steadily declining, generally a positive sign for the market. As of June 30, the number of residential properties on the market in Massachusetts was 16 percent lower than 12 months earlier.

But during the same period, the length of time the average single-family property stayed on the market actually increased – from 129 days in June 2008 to 135 days last month.

Some of the decrease in listings can be attributed to sellers who pulled their properties off the market after failing to fetch offers in their sought-after price range.

Foreclosures also will affect the pace of


http://www.realestateinvestor.com/groups/69/Start your own FREE NWCLA Blog discussion 7

a recovery.During the first half of 2009, Massa-chusetts foreclosures are running 29 percent lower than the previous year.

But petitions to foreclosure are up 5.6 percent compared with 2008, as lenders took the first step to take back nearly 14,000 properties. It was the highest number of petitions filed in any month in more than a year.

During the first half of 2009, 6.5 per-cent of single-family home sales in Massachusetts involved bank-owned properties, up from 5.2 percent in the first half of 2008. The median sales price of those properties declined from $156,000 to $100,000 over the same period.

As inventories decline and sales ac-celerate, Jack Conway’s Cahill expects that prices will begin steadily rising next year.

“I think the second quarter of 2010 is where we’ll start to see some apprecia-tion,” he said.

But any recovery will bear little resem-blance to the price bubble of the last boom.

“You’re going to see appreciation of one, two or three percent a year,” Cahill said.

Steve Adams may be reached at [email protected].

Short Sale Seller Caution!!!Be aware of who you are dealing with! The media puts such a negative spin on what we do as investors, and yet 99.9% of the investors that I personally know, are working with the highest of ethics and moral standards. One reason for this is that anyone who is anyone in this field has been mentored by people who have really made it in this business, and just about everyone of the big “Gurus” that I personally know, teach the same thing; never, never take advantage of anyone, and only be involved with win, win deals and always give back.

That being said, I want to put out a warn-ing. In light of the fact that so many inves-tors have thrown their hats into the short sale arena, which is great, because we will need as many as we can get to help hom-eowners and the economy, my warning is as follows: Be very aware of the personal-ity types of the sellers that you are dealing with. In particular, run, do not walk, but run from any homeowner who begins to hint at, or comes right out and says that they want money out of the deal. Now, we all know that the seller cannot receive ANYTHING! Some investors I know used to do a bill of sale and purchase some of their furniture or personal effects, etc. so that they could have some moving expense money, but don’t even mess with that anymore. We are too much under the microscope these days as investors.

No matter how honest you are and how good your intentions are, there are people who, in that crazy emotional state that foreclosure people get into, will try to

brand you as a thief and a crook. I have negotiated many short sales over the years and dealt with literally hundreds of homeowners, and I have had people become downright irate because I was going to make a profit off of their home. Even though the home was upside down, and they had zero equity, they just could not deal with that fact. I actually have a lady who I was attempting to help out clear back in July of 2006, that was upset that I was going to profit from the short sale of her home. She told me that she would not do the deal unless I guaranteed her, in writing, a minimum of $20,000! When I told her that was illegal, and that I could not give her anything from the sale, she said “I knew it, you are just a bottom feeding scam artist, preying on desperate people”.

Obviously that was not the case, and I told her that I would not be able to help her and that she would have to find someone else. I thought that was the end of it. Over the last 3 years since I last spoke with her, she has sent me nasty letters, and every news article that has come out about any investor who has ever scammed someone. Now, just today, I received a greeting card from this same lady, (three years later mind you), with a psychotic rant about what an A-hole, bottom-feeding scum I am. In fact, the letter is one of those types of things that makes a person a bit nervous that somehow there will be a confrontation, maybe a gun involved... whoa anyway you get the point. I am not exaggerating. Be careful, these people are in a highly emotional state, it’s really up to you to read a personality quickly, and if you get a bad gut feeling, move on to the next one there’s plenty out there.


www.nwcla.com8

Story continued from Page 3

Case Study, Arlington, MA: The Middle MarketI’ll use Arlington, Massachusetts as a sample middle market com-munity. I’ve tracked the average sales prices of single family homes from 2003 through 2009 Year to Date, shown here:

Case Study, Wellesley, MA: The High End MarketI’ll use Wellesley, Massachusetts as a sample upper market com-munity where I’ve tracked the average sales prices of single family homes from 2003 through 2009 Year to Date, shown here:

What Markets Have Been Affected?

In general, middle market Massachusetts communities, such as Ar-lington, have seen declines at the low end, with recent increases at the middle value ranges, mostly correcting the effects of the over-supply caused by the subprime mortgages. The upper value range in a middle market community has mostly seen steady growth in value, but is now starting to feel the impact of the recession.

High income communities, such as Wellesley have seen similar changes. The YTD value declines at the upper level are more pronounced and reflect not only the recession but also the lack of ready loans for jumbo mortgages.

Property Value Predictions: What Does The Trend Tell Us?

Following the trend lines we would predict that the lower and middle value ranges in most Massachusetts communities will con-tinue an upward trend in average value. The upper end in both markets will continue to feel the pressure of the recession and tight credit for 12-18 months until the recession’s negative effects are mostly dissipated and we have moved into a strong growth mode.

Posted by Richard Vetstein under Appraisal, Massachusetts Property Values, Mortgage Crisis, Rental Housing, Richard VetsteinComments

Donald J. GriffinI’m pleased to have Donald J. Griffin, MAI, SRA, an experienced ap-praiser with Don Griffin Appraisals, Inc., who is here to guest blog about a topic very much on the mind of Massachusetts homeowners, buyers and sellers: Massachusetts property values.



Story continued on Page 10

What is a self-directed IRA?A self-directed IRA allows you to use your retirement fund to invest in such things as stocks, bonds, and mutual funds, but also less traditional invest-ments, like real estate, mortgages/deeds of trust, private placements, tax liens, and other private placements and lim-ited partnerships.

It is a common belief that you can only hold CD’s, stocks, bonds, and mutual funds in your IRA. Many don’t realize that there are other options. Really, the only two things that are off-limits are collectibles and life insurance, accord-ing to IRS rules. As the name suggests, it is simply an IRA account that allows you to manage your own investments, as well as choose the investments you purchase. Buying real estate

Self-directed IRAs are also known as Real Estate IRAs when used to buy real estate. The real estate you purchase with your IRA must be treated strictly as an investment. You cannot use the property owned by your IRA for personal use, for example, a vacation home, office space, or your resi-dence. This is because the purpose of your IRA is to provide for your retirement in the future, not to benefit you now. Also, real estate property that you already own can-not be placed into your IRA. Your spouse, your parents, or your children also couldn’t have owned the property before it was pur-chased by your IRA. Property owned by siblings may be allowed, since the Internal Revenue Code (section 4975) specifies that only “lineal descendants” be disqualified.

Even though real estate held by your IRA cannot be used for immediate personal benefit, the tax deductions are too great to pass up. An IRA is simply a tax-advan-taged container for your investments. The profits made from your real estate invest-ments are tax-free, as long as those invest-ments are held by your self-directed IRA.

Setting up a self-directed IRA

The first thing you need to do is find a custodian, or bank, that will allow you to invest in real estate. Some custodians will not let you invest outside the stock market, so do your research and find out exactly what they offer with their self-directed IRAs.

Once you select one, set up a self-directed IRA with your IRA custodian. Finance the self-directed IRA account with funds, or transfer money from either a previously held retirement account or one that an employer is currently funding.

A qualified trustee or your custodian must hold the IRA assets on behalf of the IRA owner. Another option is to set up an IRA LLC. The account holder can then direct the IRA custodian to invest in the LLC, which can be managed by the ac-count holder without the involvement of the custodian. The profits of the LLC are passed on to the IRA with nearly identical tax-favorable treatment.

Overview

Using self-directed IRAs, or Real Estate IRAs, to purchase real estate is one of the best ways to add to your IRA portfolio and to save for your future. With cash-flow and appreciation, real estate has a potential higher rate of return that can ac-celerate the value of your IRA. Although you cannot use the profits immediately, the profits you make from these IRA investments have huge tax benefits. So find a bank that fits your needs and set up a self-directed IRA ASAP! We recom-mend it!

IRS Rules & Guidelines For Self Directed IRA’s

THE BOTTOM LINECongress has passed laws, rules and regulations that encourage responsible retirement planning by granting favorable

tax treatment to a wide variety of plans. Retirement plans are defined by the IRS tax code and are regulated by the Depart-ment of Labor’s ERISA provisions. Safe-guard Financial’s attorney consultants are specifically trained in ERISA law.

The Employee Retirement Income Secu-rity Act of 1974 (ERISA) (Pub.L. 93-406, 88 Stat. 829, enacted September 2, 1974) is an American federal statute that establishes minimum standards for pension plans in private industry and provides for exten-sive rules on the federal income tax effects of transactions associated with employee benefit plans.

ERISA was enacted to protect the interests of employee benefit plan participants and their beneficiaries by requiring the disclosure to them of financial and other information concerning the plan; by establishing standards of conduct for plan fiduciaries; and by providing for appro-priate remedies and access to the federal courts.

ERISA is sometimes used to refer to the full body of laws regulating employee benefit plans, which are found mainly in the Internal Revenue Code and ERISA itself. Responsibility for the interpreta-tion and enforcement of ERISA is divided among the Department of Labor, the Department of the Treasury (particularly the Internal Revenue Service), and the Pension Benefit Guaranty Corporation.

Prohibited Transactions

Defined in IRC 4975(c)(1) and IRS Publi-cation 590, these rules were established to maintain that everything the IRA en-gages in is for the exclusive benefit of the retirement plan. Professionals often refer to these transactions” as “self-dealing” transactions. This section of the code iden-tifies prohibited transactions to include any direct or indirect:

• Selling, exchanging, or leasing, any property between a plan and a dis-qualified person. For example, your IRA


www.nwcla.com10

Ginny’s FOOD DRIVE Bring your canned goods or non-perishable food items to the next NWCLA meeting Get involved and make a difference to what Ginny has been doing for years for the local community. This is also another way to get the word out about how our landlord association is helping our community By participating in the food drive at the monthly meeting, you also get a free raffle ticket for our monthly member’s incentive program raffle for door prizes.

Invite NEW MEMBERS to Join Do you know someone thinking of becoming a landlord or property manager? If so, invite them to become an NWCLA member. It is the mission of the NWCLA to educate, inspire and assist landlords in their business. The membership of the NWCLA is filled with knowledgeable, ex-perienced and helpful people. Meetings are held the second Thursday of each month at 7:00 PM. Contact Brian Lucier via email at brian @bhbgroup.com or call (978) 448-3873 for more info.

NWCLA Bucks Up for Grabs For each new member that you refer to NWCLA , You will receive $10 (ten) dol-lars in NWCLA bucks. You may redeem these dollars at our monthly meetings to buy items that will be available for sale or… you may save them up towards your yearly membership fee.

The Successful Landlord Is a must have for your landlord library and is now available to purchase at meetings. Cost is $40.00.

To contribute stories or articles for the newsletter or the web site contact Brian Lucier [email protected]

Brian Lucier also maintains online forums, blogs, and posts at http://realestateinvestor.com/brianlucier and at http://brianlucier.wordpress.com/

Our NWCLA group can be seen at http://www.realestateinvestor.com/groups/69/

Story continued from Page 9

cannot buy property you currently own from you.

• Lending money or other extension of credit between a plan and a disqualified person. For example, you cannot per-sonally guarantee a loan for a real estate purchase by your IRA.

• Furnishing goods, services, or facili-ties between a plan and a disqualified person. For example, you cannot use personal furniture to furnish your IRAs rental property.

• Transferring or using by or for the ben-efit of, a disqualified person the income or assets of a plan. For example, your IRA cannot buy a vacation property you or your family intends to use.

• Dealing with income or assets of a plan by a disqualified person who is a fidu-ciary acting in his own interest or for his own account. For example, you should not loan money to your CPA.

• Receiving any consideration for his or her personal account by a disqualified person who is a fiduciary from any party dealing with the plan in connection with a transaction involving the income or as-sets of the plan. For example, you cannot pay yourself income from profits gener-ated from your IRAs rental property.

Disqualified Persons

A disqualified person (IRC 4975(e) (2)) is defined as:

• The IRA owner• The IRA owner’s spouse• Ancestors (Mom, Dad, Grandparents)• Lineal Descendents (daughters, sons,

grandchildren)• Spouses of Lineal Descendents (son or

daughter-in-law)• Investment advisors• Fiduciaries - those providing services to

the plan• Any business entity i.e., LLC, Corp,

Trust or Partnership in which any of the disqualified persons mentioned above has a 50% or greater interest.

14 Ways to Make Money in Real EstateBy Jennifer Minge

Besides owning their own busi-ness, more millionaires have earned their millions through real estate. There are a multiple of methods of making money investing in real estate. Here are 14 ways:

1. Cash flow from rental income. This method is the traditional way of investing in real estate. You buy a property and then have a tenant that pays off your mortgage for you. The difference between your income and expenses is your cash flow which is monthly income for you.

2. Quick flips. Flipping is the art of purchasing a property well below market value. You then either quickly sell it to another investor who will do the rehab or rehab it yourself and sell it to an owner-occu-pant buyer.



NWCLA Spotlight SponsorsBy Laura Schmidt

Dear NWCLA Members, hopefully your summer was well.

I would like to introduce myself. I am Laura Schmidt and newly elected as the NWCLA Marketing Director.

We have an exciting new program that I would like to tell you about. It is called “Spotlight Sponsors”.

What are “Spotlight Sponsors? They are regular advertisers who offer some kind of ongoing deal for our members and donate a raffle prize. Wait, it gets better.

If you use the services/purchase from any of the “Spotlight Sponsors” and bring a copy of the receipt to the meeting (**or mail), we will give you $5 (five) NWCLA Bucks good towards membership, books or anything else that may be available.*** For Retail locations, purchase must be at least $100.00

We ARE MAKING AN EFFORT TO GET OUR MEMBERS AND OUR ADVERTIS-ERS (Sponsors) together. Every advertiser is used by landlords. We need them as much as they need us

Don’t forget to bring a non-perishable food item for Ginny’s and receive an extra Raffle ticket.

If you know someone who you use for the running and maintaining of your invest-ments and they might like to advertise with us, please let me know at [email protected]. If they do decide to advertise with us, we would love a short testimonial from you or any other cus-tomers in the organization that uses their services.

Thank You and WELCOME BACK!

Board or DirectorsNorthern Worcester County Landlord Association.

3. Wholesaling. You buy houses as low as .10 cents on the dollar and then turn around and sell them after a marginal mark-up in price. Traditionally wholesalers will purchase REO properties in bulk from bank that allow them to get a substan-tial discount on the price

4. Bird dogging. Investors will pay people who bring them a good deal in which the investor will be able to profit. Bird dogging is the process of finding these properties and then selling the lead to investors.

5. Become a real estate agent. Real estate agents are paid commis-sions when properties they have listed are sold. Agents can also work as a buyer’s agent whereby they are paid commissions when their buyers pur-chase a property. Most states require real estate agents to be licensed.

6. Become a real estate appraiser. Most of the time a buyer will have an appraisal done a property they are considering purchasing to determine a fair market value. As a licensed real estate appraiser you can perform these appraisals.

7. Rehab for other investors. If you are a very skilled handyman, then you can do the rehab work on properties purchased by other inves-tors.

8. Private money/Hard money lender. Some investors are unable to obtain traditional financing so they will utilize financing provided by private and hard money lenders. You will lend out money you have in exchange for a rate of return on the loan and points charged at closing.

9. Short sales. Property owners who are behind on their mortgage payment and on the verge of foreclosure are the targeted candidates for a short sale. You are able to purchase the property from the

bank up to a 40% discount on market value. You can then turn around and sell the property at market value.

10. Probate properties. Probate is the legal process of admin-istering the estate of a deceased person by resolving all claims and distribut-ing the deceased person’s property under the valid will. Heirs may not be interested in the property but would be interested in selling the property at below market value so they can receive the cash proceeds from the sale.

11. Buy notes. Property owners will sometimes sell properties and finance the sell directly. You can purchase the note and the payments associated with that note at a discount.

12. Buy NNN leases. NNN is a triple net lease when the property owner is responsible for paying for all property repairs, taxes and insurance. When a Burger King opens a new store, they will generally create a 20 year lease for the property and then sell that lease so they can recoup some of their costs in building the building. If you purchase this lease you will receive monthly payments from the property owner without any obligation in maintaining the property.

13. Property management. Investors may not have the time to manage their own property or are unable to manage it if it is out of town. As a property manager you can get paid for managing their properties for them.

14. Become a coach. If you have extensive real estate knowledge, then you can charge to become a mentor or coach to newer investors. Beginning investors will pay to gain from your expertise.

May 2008Landlords Helping Landlords

NWCLAP.O. Box 276Fitchburg, MA 01420

Association of the year for 2003


NORTHERN WORCESTER COUNTY LANDLORD ASSOCIATION

Schmidt’s Smorgasbord

NWCLA Monthly Meeting MenuSept, 2009 Herb Turkey Breast for Sandwiches,

Cheese, Pasta Salad, Chips and fruit cups for desert.

Oct 2009 TBA

Nov 2009 TBA

Dec 2009 NWCLA Holiday Party Laura Schmidt is our Food Director as well as Adver-tising Director and she want to hear from you. If you have menu suggestions or ideas, kindly talk Laura at the food table! We welcome your comments.

NWCLA MEETING NOTICE SPECIAL GUEST SPEAKERS

September’s NWCLA meeting will feature Jamie R. WilliamsonExecutive Director

Massachusetts Fair Housing Center.

Thurs., Sept 10th, 2009 7 PM – 9 PM ALL Members are welcome to

attend the meeting atThe Monty Tech Cafeteria located in Fitchburg, MA

Documents

“Landlords Helping Landlords” NWCLA · best landlords that we can be! Laura’s e-mail is . [email protected] or mail her stories to: NWCLA, ATTN: Laura Schmidt, P.O