Welcome to the first step of your Journey

Congratulations on taking the first step in what will be a life changing experience if you choose to embrace it.

Although it seems like it was a lifetime ago for myself, I remember when I decided to change my life and take things into my own hands.

It was when I made the decision to take back control of my life.

The first step is beginning and there is no way to get to the end without starting.

Although it may seem cliche, a trip of a thousand miles starts with the first step.

This blog post is your first step.

With some motivation and planning this will be the beginning of your journey that will turn into more than just a dream.

It will turn into a lifestyle that you have created for yourself.

About the author… ME

I have been in the trenches of real estate investing and investment in general.

I have personally flipped tons of homes, and currently work in single family developments as well.

I lend out my money through a finance company, but also go directly to investors to ask for a lot of money on several occasions.

I have made mistakes that have cost me tens of thousands of dollars and made decisions that have turned a small profit into huge ones.

I don’t enjoy writing, in fact I despise this type of writing, but I do enjoy the entrepreneurial pursuit.

The mere fact that someone can use the tools I will provide to create wealth for themselves is beyond the pain and suffering I have endured in presenting the information.

Many of you will try this and many of you will fail or walk away from Real Estate investing.

It is just a fact of any pursuit of this nature.

Even though you may not become the next TV Flip personality, you will be doing something that is special and developing yourself.

So with that in mind, buckle up and here we go!

What is your goal for Wealth?

When you think of wealth what do you envision in your mind?

  • Is it sports cars and fancy dinners around the world?

Is it having enough money to do what you want and when you want to do it?

  • Does it mean that you have no debt and can live comfortably within your monthly means?

Does it mean that you have a little extra savings and time to do traveling around the world?

What does it mean to you….

The first part to understanding your own success is to understand what you truly perceive as success.

Take a minute right now to write down some ideas on what you feel will mean you are wealthy. Be honest and say what you truly feel, remember this is your idea of wealth.

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Since this is a blog write these somewhere where you can reflect on them and remember what your idea of success is.

It is now time to start making the change that will get you to those wealth goals. Find out What is stopping you from getting to this point….

Can you get there?

What does is take and will you do it?

Do you have it within you?

The answer to these questions is

Yes!, You can get there!

Yes! You will find out what it takes!

Yes! You do have it within you to do this!

How?

You will need to commit yourself to something special, and something that can make money you are searching for.

That special something is going to require you to change the way you act and respond.

It may require you to gain more confidence, become an owner, work two jobs, and many other things. That is why the manta below is so important to me…

“The most important thing is this: to be able at any moment – to sacrifice what you are, for what you will become!”

-Eric Thomas

This seems like a simple mantra but it holds significance beyond what you see on the surface.

Let this settle in and add it to how you look at your daily activity.

Here are some examples to think about and ask yourself:

  • I need to save money to build my business, but does this starbucks really hurt my goal when I am only spending $4.00?
  • I always go out with my friends on Friday night- it helps me unwind from the work week
  • I don’t need to go to the gym today I am going to go home and relax.
  • Does sleeping in late on Saturday really hurt?- I worked hard all week
  • I don’t like critique from others- it makes me feel uncomfortable and is hard for me to take with a grain of salt.
  • How could I possibly get someone to finance a project for me that is far beyond my means?
  • Do I need to network every week?- I went last week and I met no one that was of value

Now let’s dive deeper into these questions and see what you think:

  • I need to save money to build my business, but does this starbucks really hurt my goal when I am only spending $4.00?
    • Would you shake your head at getting a check for $1,040? How about finding $20 on the ground? Well that coffee is costing you that $20 a week and annually $1,040… There is a lot that you can do to build yourself for $20 a week or $1,000 a year
  • I always go out with my friends on Friday night it helps me unwind from the work week
    • Do you think your competition will be going out on the weekend? The answer is no, someone will be trying to beat you no matter what. When you are early on in your growth process you must spend your “equity” wisely. You don’t have dollars right now, but you do have time. Time is a resource you must manage in order to beat your competition. You can rest in the future as you develop habits and techniques that allow you to swap Sweat Equity for true Cash Equity
  • I don’t need to go to the gym today I am going to go home and relax.
    • You need to keep your head right at all times to be ready to act on opportunity. Your office for the most part, is your body. Take care of your office as a developing entrepreneur. Working out on a regular basis saved me from the 80-90 hour work weeks I used to build my business.
  • Does sleeping in late on Saturday really hurt?- I worked hard all week.
    • Opportunity does not come to people. Opportunity is what people make. Sleep in and don’t work if the opportunity missed is worth the sleep. Personally I do not pass on opportunity for sleep
  • I don’t like critique from others- it makes me feel uncomfortable and is hard for me to take with a grain of salt.
    • Learning from your mistakes is one of the most important parts of any development process. That means that you must take critique from others who have made mistakes in the past. This is free knowledge if you are willing to hear it and develop yourself from it. Whether you learn from their mistake, or make it on your own.
  • How could I possibly get someone to finance a project for me that is far beyond my means?
    • How do you think everyone gets that first deal done? You must be willing to put yourself out there and be uncomfortable. If you always tackle projects that are within your bandwidth how will you ever grow? Before you can get to the point of knowing what you are doing in business, you must first learn how to take risk with others who trust you and your ability to make decisions.
  • Do I need to network every week?- I went last week and I met no one that was of value
    • How do you know that you met no one of value at that event? If you were networking 2 years ago and met someone who was in a different field, couldthey be of value now if you started a new business? No one knows you until you get in front of them, whether it be in person or through marketing. We are focusing on growing your business in a new field, so if you are focused on sweat equity you cannot be in front of enough people.

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Perspective

What is perspective and what does it mean?

Currently, if you are reading this book, your goal is to better yourself. Something you are presently doing isn’t working…

Am I right?

If I am wrong, good for you, proceed to the end of the book and lets get in contact to do some deals.

If I am right, keep reading and lets talk about perspective.

What are you willing to do to be wealthy?

Take some time to really answer this.

What are you willing to do to be successful?

Take some time to answer this.

Now let’s go over some scenarios real quick.

  • Are you willing to go and knock on doors and ask people tough questions about their financial well being?
  • Are you willing to get in the trenches and help someone move their furniture and throw away their trash to get a sale?
  • Are you willing to talk to people who intimidate you in order to convince them that you are worth working with?
  • Are you willing to step out of your comfort zone every single day with the intention of making a deal come together

Before we go through these let me tell you a story about getting out of your comfort zone.

In one of my businesses I was confronted with a situation in which a hoarder was in need of financial assistance and had a home that I wanted to purchase.

  • I went and sat in the home, which unfortunately was not suited for human living, and went through the process of what it would take for me to buy the home.

She was game for the transaction so I got my team together and started the process to acquire the property.

(Im going to show you my Exact formula later in this blog.)

Things came together slowly but I was able to get everyone on board.

Things were looking good until at the last minute

The seller decided not to sell!

I was put into a situation where I didn’t know what to do and didn’t know where to go.

So I reached outside of my comfort zone and contacted those who were more experienced. They taught me what mistakes I made and where the deal had gone awry.

With some advice and money (which I got from them), I was able to bring things around with the seller and close the deal.

It became one of the most influential deals of my life and I will be revisiting it again in the blog.

Here are a couple before pics from the project

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Why do I bring this story up?

In business, and in life, the easy way out is not always the best route. In fact learning from a situation and getting more out of it by pushing through has greater rewards.

Now, I know that this is a success story I am telling here and it seems like it may not be comparable to some of the challenges that you face. But, you’re wrong.

I don’t know how to make that nice and sweet but you are. One of my favorite quotes and mantras to live by is

“You miss 100% of the shots you don’t take.”

    -Wayne Gretsky

I could have easily stepped away from this deal and made my way to the next deal.

At the first sign of adversity I could have packed up and went my way. Instead I did a few things that I find important in analyzing anything in business or a deal:

  1. Why did I want this deal in the  first place?
  2. Was I reaching?
  3. Is it a deal worth doing?
  4. If I worked it this far why walk away?
  5. What can I do?
    1. Move on
    2. Tackle the problem and get in front of it
  6. Who can I lean on or leverage in this process?
  7. Who knows more than I do?
  8. Who would be willing to come in on this deal to make it happen?
  9. What does this deal cost me at this point?
  10. Cash it will cost to close and/or cash I could lose if it does not close
  11. What is the value of the lost opportunity?

All of these items are important in making a sound and clear decision.

There have been times in my professional career where I did not ask or answer all of these questions of myself and came out of a situation I created without gaining everything I should have.

This comes back to the fact that I must always be willing

to sacrifice what you are, for what you will become”

Most missed opportunities come from a lack of confidence or a lack in drive when you feel you have put your all out there.

No matter what never lose that drive and never lose that feeling you have inside of you when you get started today.

Do not put this blog down or turn off your browser until you are done reading this blog TODAY!

This is a simple request but many will fail at it. Some of you are making excuses right now.

Stop with the excuses and start making the change that you want.

If you aren’t going to change now when will you change?

Someday never happens and that is not where you should set your goals.

The Truth about this blog…

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Most of you will not get far in your journey.

Some of you will give this your best effort and give up with adversity.

Some will come close and taste some success but then get lazy or sloppy and find themselves on the sideline.

However, a select few of you will become:

  • Amazing entrepreneurs,
  • Investors,
  • Game changers
  • Leaders in the business world

And I want every single one of you to be this, but I know that’s not possible and definitely improbable.

Why am I so negative about this….

Because I have had my successes and my failures. Each one comes at a cost and a lesson. Failures are just as important as successes.

Even more so if you get to the bottom of what made you arrive there.

PROVE ME WRONG!

Show me that you are the entrepreneur that can rise above the rest and the individual that can do more and do it better than those around you.

There is nothing special about me. All I did was commit to success and go through the process. Prove to me that you can do the same thing!

When you read this book for the first time you may become a little overwhelmed with all the new information. This is normal.

The trick is to reference this book as you move along in your own deals. As you gain experience, and re-visit this book you will find that the information provided has become common knowledge to you.

Remember the best teacher is to go out and do it yourself (with some knowledge under your belt).

I am challenging you right now: Move towards your goals.

If you don’t, at minimum take items you learn here and apply them to your life and everyday circumstances.

Whether it’s as simple as learning from your mistakes in your current job and making steps to change them, or going in a completely different field and applying what I have set forth- be sure to take some sort of action..

Don’t waste your time and not learn lessons..

Take something from your experience and move forward. Small choices over long periods of time turn into large consequences.

Setting yourself up with small, good and efficient decisions will empower your future.

 

***Book Mark this Page Now- You’ll Need To Come Back To This***

 

Chapter 1: How To Enter The Real Estate Investment Game

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    • 4 Entries
      • Invest SFR and Multi Hold
      • Invest SFR and Multi flip
      • Invest passive
      • Invest in yourself and Create Value

 

1st Entry… and most common

Invest SFR and Multi Hold

Investing in real estate has been around for a very long time. Since the first piece of land was owned it was then immediately valued. Although the reason for owning land has changed beyond having space to cultivate and sustain.

Now people use their property for many reasons and Single family Residential and Multi Family Residential are big for investors. Here is what investors look for:

  • Cap Rates that are symbolic of the local market and current interest rates
  • Low vacancy rates
  • Reliable construction and materials

Pitfalls

As in any investment with risk comes reward, and vice versa. In this sense many investors prefer to buy sound properties and manage their tenants well to minimize risk. Here are some of the risks

  • Tenants not paying their rents
  • Squatting and eviction
  • Property Damage
  • Deferred Maintenance
  • Liability for injury
  • Theft, Vandalism
  • Economic

 

2nd Entry… why most of you are here

Invest SFR and Multi flip

As made popular by television and the internet, FLIPPING! The basic tenets of a flip are to buy a property that is undervalued or distressed. Distress can be one or more of a few things.

  • Financial Distress
    • Homeowner is in a situation which requires them to sell the property short.
    • Homeowner can no longer make payments on the property and has gone into default
    • Homeowner has gone into Foreclosure and has had their home taken back by the Lender
  • Physical Distress
    • Deferred Maintenance has added up to the point that the homeowner can no longer afford to make repairs
    • Physical Defects are apparent and create unsafe environment
      • Cracked Slabs
      • Failing Septic systems
      • Moving hillside
      • Mold issues
  • Trust Sale/ Probate Sale
    • Death of an individual has forced sale of property
    • Home could be outdated or in disrepair

The situation for a home to be undervalued could come from one of these few reasons as well.

  • Home is outdated for the area or neighborhood
    • Ugly house on the block
  • Home is smaller or lacks room setup demanded in area
    • 2 Bedroom 1 Bath home in a neighborhood with 3 Bedroom 2 Baths
    • 3 Bedroom 1 Bath home in a neighborhood with 3 Bedroom 2 Baths
  • Smaller home for area
    • 900 Sq Ft home in a 1300 sq foot neighborhood
  • Home could be located in a high rental area
    • SIngle Family Home in a neighborhood full of multi units
  • Poorly Marketed property
    • For Sale by Owner property
    • “Friend” Realtor listing property
    • Selling in slow months (November-March)
  • Homeowner unprepared for an offer
    • You see a house you want- You make an offer and they accept. Plain and Simple. This would give you an opportunity to be the only offer and have no competition, therefore providing a chance to purchase for less than value.

Similar to the other classes of investment this carries a similar risk to reward relationship. While the profits can be very high and very nice there are many mistakes that are made on a regular basis that can eat up your profits.

We will go into this further in the blog By then you should have that pen and pad out take some notes.

3rd Entry… Passive Investment

One common thread in investing is that investors need money to complete the projects they take on. Whether they do it with their own funds or leverage other investment companies or individuals.

I, like many more before me, believe that leverage is a very good and important thing to have in place to stretch your dollar to its maximum value. Leverage is also the bane of many deals and must be managed appropriately.

Here are some examples:

  • Investment in Real Estate
    • Private groups that purchase Real Estate within a defined model
    • Trust Deed Investing- The investing with the use of a Trust Deed to secure the loan that is given
    • Equity funding within a Joint Venture, which may or may not be secured with a Trust Deed.

Investing in real estate passively carries a full set of risks that range from high risk and reward to low risk and low reward. What it comes down to is an understanding of the investment you are getting into and the property and principles it is built behind.

Here are a few examples of what you may come across in the passive investment world.

First- High Risk and High Reward

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Investment into a development that is looking to change a land use or city planning zone to add a large shopping center.

If the center is approved the property would become exponentially more valuable for the investors involved in the transaction. This could entice investors with a return well into the 200%-500% range on cash over cash.

However, the reason the return is so high is because the development might never get off the ground and possibly never take hold.

Your money would be put up to pay the cost of developing plans, architects, civil engineers, artists, and paying the City to review your plan. Multitudes more could be spent on attorneys to appeal the process.

If it never takes hold, you are out of your money.

Second- Low Risk and Low Reward

Passive investment into a holding company that maintains rental units within a given or part of the country.

Money is spread out across many units, and thereby reduces the risk of having one bad egg ruin the portfolio.

Professionally managed property that is purchased under set guideline will give  the investor a general idea of how the fund will return.

With that said you will never have amazing double digit years, but you will also not see striking losses in the double digits as well.

Moral of the story: There is no Magic Pill to get high returns without taking risk.

That does not mean you should avoid risk though, it just means you need to learn about it and identify it!

4th Entry… Invest in yourself and Create Value

Many people want to get into real estate and have no idea how to do it. Well you just learned several ways that you can get into investing and all of these entry points offer opportunity for you to earn money.

Here are some of the  opportunities

  • A simple flip project
    • Needs a realtor to get the deal
      • or an individual to find the undervalued home
    • Needs escrow officer to perform the transaction
    • Inspectors to look at the property and verify information
    • Loan officers to prepare loans
    • Investors to fund the project
      • Perfect opportunity for a Trust Deed Investment
    • Contractors to do the work
    • Designers to design the work
    • Project manager to manage the pieces
    • City workers to verify permits or facilitate recorded documents
    • Cleaning company to prep home
    • Staging Company to make the home appealing
    • Photograph to shoot home professionally to get buyers excited
    • Realtor to sale the home
    • Realtors to do open houses
    • Escrow to sale the home
    • Inspectors
    • Termite companies, Septic companies, repairmen for repairs
    • Appraisers to appraise home
    • Loan Officers to prepare loans

These are a few of the ways that someone can get into a real estate transaction. For this book we will be focusing on how you can get yourself into the equation from the aspect of finding that undervalued home.

It is the second bullet point up there^ and how you can earn hundreds of thousands of dollars or more!

Chapter 2: The world of flipping houses!

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Some basic knowledge and terms to take in …

Like any profession or business–house flipping has it own “language” that is common place amongst those in the industry.

The following are some concepts and ideas for you to know:

Allowance: A set amount of money in a Bid or a Scope of Work to use for the purchase of an item or labor.

An Example might be: The bid had an allowance of $300 for the chandelier in the kitchen.

ARV: After Repair Value-

This is a reference to what a home will be worth once the rehab has been completed on the home. This is a truly crucial part of any rehab process because the value you can receive at the end is most important– this is how you can assess profitability

Assignment Contract: Ability to take the right to purchase from one buyer to another buyer

The wholesaler got the property under contract so he could sell it off to another buyer with an assignment contract

Contingency: a provision for an unforeseen event or circumstance.

An example might be: The contract has an Appraisal contingency to ensure that the home appraises for the value of the contract.  If the house doesn’t appraise, the buyer has the option to cancel and get his money back because of the contingency in place.

CMA: Comparative Market analysis-

This is one of the tools used in finding a property’s ARV. This will show you the available properties and recent sold properties within a given area. It can be altered and changed to fit your exact specifications.

Comps: Comparable properties

These are homes that are comparative to the home that you are looking at

Deal with “Hair” on it:

This refers to a deal that is more complex and has more moving parts involved. Examples might be a foundation repair, or a addition of substantial size.

Another example might be property of higher value that yields a lower buying pool at completion.

Executive Summary:

This is a form that states the “vision” of what you are trying to complete in a property when performing the flip on the house. This is a very crucial part in establishing the ARV

Hard costs: These are costs directly related to the construction. They generally only include materials and labor. However, they often contain the cost of permits for a project to be completed

Hard Negative: This is an item that will inhibit a buyer from purchasing a home.

The home backed up to the freeway, creating a hard negative for many of the possible buyers.

Holding Costs: These are the cost associated with the project that are not “Hard Costs.” The cost of “holding the property”. This might be the interest rate on your credit line, or the loan you get from a 3rd party. It is also important to realize that this is the cost of your money being in a project for a set period of time and not in another project, refer to Opportunity Cost

JV: Joint Venture

This is an agreement between 2 or more parties to take on a project/ flip as a group and collaborating multiple parties into a single property or series of properties that are going to be completed.

MAO: Maximum Allowable Offer-

This is a calculation of the maximum amount of money that someone can pay for a property given the ARV.

Opportunity Cost: The cost of time, money or any other asset that is given up by taking on a project or activity.

An Example might be-:“There is an opportunity cost in taking your money out of the stock market to put it into real estate instead.”

Scope of Work: This is a reference to the work that will need to be done in order to bring a property up to the ARV that you have assessed.

Soft Costs: Soft costs include architectural, engineering, realtor fees, escrow fees and legal fees, and other pre- and post-construction expenses.

Wholesaler: Individual that get contracts for property by placing offers and then sells the purchase contract to another investor. The practice is bad for the market in general as it drives up prices, but has a time and place in any market. They use an assignment contract to do this.

I will not be teaching this method. I believe in growing businesses not hurting others to make transactional income that is unsustainable. I will provide a separate series on it in the future, to help individuals disposition contracts they can not fulfill.

What is the idea behind flipping….

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The idea behind flipping is very simple and if followed can reap monetary rewards to those who practice it. It is too:

“Take a product that the general buying public does not see value in and insert a certain amount of value that can be recognized by the public. In exchange for your value creation you will receive a monetary gain for recognizing what the public could not see”

What flipping is not-

  • Showing off the coolest kitchen in the neighborhood
  • Buying any ugly house for a set amount below market value
  • About making your dream home
  • About avoiding repairs
  • Hiding issues that exist in a home

The essence of the flip is that you are creating value.

Value is the most important thing in any situation–The “why” behind every decision should be based on the VALUE of it.

Value does not correlate strictly to dollars spent or dollars created in the sell.

Value also correlates directly with the ability to keep the dollars you have already created, or have.

This is something most people forget in any situation that involves investment. The ability to keep your hard earned money is just as important as the next dollar.

This leads us to dive further into the most important concept of All… VALUE!

What is value and how is it created?

In real estate, fair market value is what happens when a home is marketed to the general public and allows individuals the opportunity to make “willing and able offers.”

In business, value is created by either creating a product for a set price and selling it, or by creating an opportunity for someone to participate in a similar process.

In life, value is created by individuals who enjoy each others company and in exchange for it, give up a valuable commodity of time.

In the end value comes down to two or more parties agreeing on an exchange of time and/or money for a separate commodity.

Now lets digest this for Flipping a home…

A property enters the marketplace and is ready for purchase by an open market buyer.

In our case, investors come to see what they are willing to put into it and what they will be able to make. This is the process of value done by the investor.

These are the the 3 steps for you to remember:

  1. What is the ARV?
  2. What is the Scope of Work and materials cost?
  3. How long will I hold this investment?

Chapter 3: Finding the Property to Flip!

motivated-seller

So before you can analyze a property you will need to find one. So now it is time to get that first house, but where do you start?

There are several ways to find property and here are the two basic types

  1. Marketed property: These homes are listed and can be found on your local Multiple Listing Service (MLS). Here is how to find them
  1. Contact a local realtor and form a relationship
  2. Search websites such as
    1. Zillow.com
    2. Trulia.com
    3. Redfin.com
    4. Realtor.com
      1. These websites are public sites that place MLS info out for the public to consume
    5. Call on Real Estate Signs that you see in yards
  1. Off Market Property: These are properties that are not actively being marketed or have not been placed on the market. These properties will need some level of motivation to make a sell possible. Here are some sources for finding these.
  1. propertyradar.com
    1. This is a great website for finding foreclosures and Trustee Sales
  2. Driving for Dollars
    1. Driving neighborhoods and finding the ugliest houses.
  3. Wholesalers
    1. Individuals who get property under contract and then market it for sale to other investors
      1. You will need a marketing plan/strategy for these off market properties- to find out  and copy the strategies I personally use click here for more info

With these items in mind what can the home be purchased for?

  1. Can you get a higher ARV
    • Forced appreciation
      • Add an additional bedroom to the home
      • Add an additional bathroom to the home
  • In any case where this is attempted it is important that you follow a simple rule of 1 to 3 on the cost to value. This means that a bathroom that costs 10k to add to a home must raise the ARV by 30K to make it worth the risk and the cost associated with it. You can’t win every one of the forced appreciation bets you take, so make sure you leave room for error over time.

Remember you always protect the dollars you have first!

  • Value not seen by the marketplace.
  1. Can you reduce your Scope of Work?
    • Can you avoid repairing certain items because they are in decent shape?
    • Have you bid out enough contractors to know that you are getting the best price?
    • Can you purchase bulk materials and use them not only in this house but others to create a cost savings?
  1. Can you reduce the holding period for the home
    • The quicker your cash is back the sooner you can get it out to the next investment. This goes for your dollars and your investors dollars.
      • Do you need permits for the repairs?
      • Is there a quick fix option that will get you money back more quickly?
      • How fast is the area currently selling?

The sooner your money is back in your pocket the sooner you can reinvest it!

An example of this would be doing 3 projects at $40,0000 in a year and making $120,000.

Then there is the option of doing 5 quick projects at $30,000 in a lower price point and making $150,000.

Which would you prefer to do on an annual basis?

The return is always subjective to the money invested and the time invested!

Coming up next… ARV and doing your valuations

Chapter 4: Comping Houses

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First things first, not all homes are the same!

A mistake in the ARV will lead you down a path of problems that can outreach your ability to overcome them in a transaction.

So here are some guidelines that you NEED to use for arriving at your ARV

COMPS

    The Guidelines

Comps are homes that are similar to the home that you are looking at. You use comps to arrive at your property’s ARV.

From this point on the property you are finding the ARV for will be called the ‘SUBJECT.”

Here is what you need to take into account when finding comparable properties::  Make sure the comparable properties:

  • Are within ¼ mile radius of the home
    • May go to ½ mile radius if required
  • Were Sold within the last
    • 3 months are the best
    • 6 Months can be used if you are missing sales. (Note these can come back to bite  you in the end. Check out my Supplement- Acing Your Appraisal)
  • Are within the same zip code and school district
  • Make note if they are on Septic or Sewer
  • Have NO A/C or have A/C
  • Are they new construction or not remodeled
  • 10% Variance MAX in sq footage
    • Ex: Your Subject property is 1300 sq ft- you only want to look at similar properties to comp yours that are 1430 sq ft or less (1300 sq ft x 10% = 130 sq ft + 1300 sq ft = 1430 sq ft)
  • Have a  similar Bedroom and bathroom count
    • ex: Your Subject property is 3bd/2ba- look at comps that are 3bd/2ba

Remember: Apples to apples items. These can also include:

    • If the properties have a Garage- or type of garage
    • Lot Size
    • Similar Hard Negatives
    • Location
      • Near a road
      • Near a Freeway
      • Open lot
      • Nicest home on the block or similar to other
      • Cul-de-sac or busy street
  • Style of Architecture
  • Age of home
    • Homes vary in age but dramatic differences should be noted. Also to note an older home does not mean it is automatically less valuable

After you have your criteria for comparable properties to consider, you are going to pick your comps.

You are then going to average out the comparable properties sold prices and multiply your average price per sq ft by the sq ft of the subject property.

You have now arrived at your ARV price for your property and you will need to decide if the ARV matches your vision for the home.

You may need to have a Realtor help you with comping a house in the beginning.
Lastly and one of the most important  -You need to double check your work!

Check to see if there any comps that stick out as outliers:

  1. Too High- Comp well over the neighborhood prices with similar features

If you are using a high comp for values you need to make sure it is not skewing your numbers and unattainable. Things that could have happened

  • Not an arms length sale (maybe dive into what this is real fast)
  • Has features you could never add to your property
    • Built in electronics
    • Pool
    • Finishes far superior
    • View that is only possible from that house or houses in its direct proximity

This goes back to always protecting your dollars.

  1.   Too Low- Comp that is well below the market average

If your ARV is too Low here are some of the items that could be affecting the price

  • Were the comparable properties fixers?
  • Were the comparable properties short sales?
  • Did the comparable properties sell during the slow season?
  • Were the comparables marketed appropriately by the seller?
  • Were they arms length transactions? (Your Realtor can look this up for you)

In both of these cases you NEED to investigate why a comparable property is sticking out from the group you picked for your ARV analysis.

You always need to make sure that your numbers work.

You may want to practice on your own a bit.  Pick a house on your street and use www.redfin.com to practice.

When you have your actual first property to go after you may need a little help from a Realtor in the beginning, but a good Realtor is well worth the money.

You can email us for a good Realtor in your area at: Support@BetterTomorrowGroup.com

Now that you have a basic understanding of how to arrive at an ARV and how to convey this image to your team for a property-Lets look at a real life example of a CMA (comparative market analysis).

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Make sense?  Probably not just yet, that is why I have put a full break down in your packet that came with the book!

Just keep practicing and it will click.  

Now that you have the basic knowledge of what a flip is, and how to comp it– we can jump into how you can do your first deal!   

Chapter 5: Estimate of Repairs

contractor-3

    Before you can make an offer you must know what the repairs are going to be, or be within a close range, to make an offer.

This requires you to do an inspection of the home to find out what is going on and what the issues are that you will be facing.

Here is an Estimate of Repairs sheet for you to use.

There is an additional copy that came with your purchase that you can tweak for your personal use as you learn!

*The prices provided are as of 2014 in the San Diego, Ca market.

(Please disregard formatting, placing informational arrows throughout changes the layout)
Street Address: ___________________________________________    Date: ____/______/______ Inspected By: _____________

City: __________________________________________________________   (   ) 2Unit (     ) Other___________ (  ) Vacant

Unit 1: Bed_____________ Bath____________Sq. Ft_______________ Lot ____________

 

Inspection Checklist Yes #

Units

No Repair Cost Calculations Repair Cost
1. Need a roof? (Single ): $ 8,500    ←  1

1 Layer of Shingles Added: $ 2,750-$3300

2. Exterior Paint / Siding / Stucco? Paint: Single Family $1.50 sq ft.(1500 sq. ft.): $2,250

Siding / Stucco (Single 1500 sq .ft): $7,000

3. Need Windows?

4.  Need SGD? ←2

# of Window x $275

# of SGD x $800

5. Garage Need Repair? 1 Garage Door (2car): $900                 1 Reframe Structure: $1,5800

1 Car Paint: $500            2 Car Paint: $1000       Roof New: $2,000

6. Yard cleaned or landscaped? ←3 Clean Yard (Easy): $300            Clean Yard (Hard): $750

Landscape (Easy): $500              Landscape (Hard): $1,000

7. Heating or furnaces need replacing?←4 Replace 1 Furnace: $ 2,000

Replace 1 Hot Water Heater: $ 800

Install 1 Zone Baseboard Heater : $500 per unit

8. Plumbing need repair?←5 Plumbing: $ 2,500 (new bathroom & kitchen fixtures included)
9.  Electrical Need Repair?←6 1 New Panel: $1,500                         1 Floor Fixtures: $200

1 New Service, Panel, Rewire House: $4,000

10. Foundation need repair?←7 Reframe 1 Support Beam: $300

Seal Basement: $ 250                 Pour Concrete Floor: $800(5yrds)

Replace Stairwell: $1000           Jack 1 Support Beam: $200

11. Need interior paint?

12.Interior wall and ceiling texture.

Interior Paint: $1.75  a  sq. ft. as a general rule

Single Family: 1500 sq. ft : $2,625

Texture: Single Family $1.25 sq ft.(1500 sq. ft.): $1,875

12. House need carpet?

13. House need tile / vinyl?

14. Floors need to be sanded?←8

Single Family: $1,200                                                                      1 Unit Carpet (500 sq ft): $800   Carpet Rule: Sq ft / 9 x $14=Cost

1 Kitchen Ceramic tiles (10×10) = $400

Laminate Install = $4.50 sq/ft         Sand & Refinish= $2.50 sq/ft

15. Unit 1 kitchen need repair?

16. Unit 2 kitchen need repair?

Single Family Rental: $3,000

Single Family Nice: $5,500

17. Kitchens need appliances? (Clean Steel) ←9 1 Stove: $650                                        1 Refrigerator: $900

1 Overhead Microwave: $350               1 Dishwasher: $300

18. Unit 1 bath need repair?

19. Unit 2 bath need repair?

1 Unit Redone Completely Full Bath: $ 2,500

1 Unit Redone Completely Half Bath: $ 1,000

1 Unit Change Fixtures Only Full Bath: $ 500

1 Unit Change Fixtures Only Half Bath: $ 350

20. Sheetrock damaged or need replacing?←10 General Rule: $3.00 a sq. ft for total gut job finished

Single Fam. Gut (1500 sq ft): $4500 (Rock &Tape)

21. Dumpsters?

22. Decks?

23. Millwork (Doors & Trim)

24. Other:_________________________←11

Dumpsters: $500 per dumpster

Decks: 10×10 = $2,000                                           15×15= $3,000

Hollow core pre-hung installed : $100  Entry door : $500

25.  Misc. Repair Cost x .05 ←15
26. Comments:←16 Total Repair Cost:

Asking Price    $____________←12___________

Comp 1 Address: ___________←13______________________________  Info.___________________________________ Sold:_______________________________________________________   $____________

Comp 2 Address: _________________________________________  Info.___________________________________ Sold:_______________________________________________________   $____________

Comp 3 Address: _________________________________________  Info.___________________________________ Sold:_______________________________________________________   $____________

 

Heating System:    Boiler    Furnace                    Water/Sewer:City   Septic/Well ←14

Heating Fuel:    Oil    Gas                    In Ground Oil Tank:    Y / N

Hot Water Fuel:    Gas     Electricity    Oil

Items Highlighted

  1. This is the average cost to replace a single story home that is 1300 sq ft with new shingles. If a roof has been replaced several times it may require this full process of putting a new roof on. If it has not been replaced you may put a new layer of shingles on it, if it is structurally sound and not beyond repair. Ask your contractor in bidding what the evaluation is of the roof and verify it compliance with local building codes.
  2. SGD- Sliding Glass Door. In many homes that you rehab the sliding glass doors may be able to be saved from the rehab. Although this is a money saver it should be done with caution. Many times the aesthetic of a new door will increase the value of the home by 4-5 times the cost. Having a beautiful kitchen that exits through the previous door may be a detriment. Remember it is about spending money where it matters and can increase your return. Additionally not all older homes have sliding glass doors. This can be a simple upgrade that will raise the value of the home dramatically. Always verify the structural capacity to use a Sliding Glass Door with your contractor or engineer. There is generally always a way to do it, if you can be creative or open to discuss the options with your contracting team.
  3. For this area you need to evaluate what it takes to get at yard that is going to sell your home. What are the yards like in the neighborhood and what does that entail for you to get to a similar value.
  1. Do you need sod?
  2. Do you need irrigation?
  3. Are there trees that need to be removed, or a large amount of waste?
  4. Is there non-organic waste
    1. Sheds
    2. Swing sets
  • Cars, tires, furniture
  1. Will you need to do grading or any water intrusion protection in order to be ready for sale.
  • If you have a water heater that is close to 8 years old or shows signs of damage or rust you need to plan on replacing. It is far easier to replace the heater while you are repairing the home than after you are doing your inspection with the home inspector. This is a point that many new homeowners will not let you off the hook of repairing. SO PLAN ON REPLACING AND DON”T THINK YOU CAN GET AWAY WITH IT.
  • Plumbing is a silent, and stinky, killer of profits. If your home is over 30 years old you should consider that there may be plumbing issues. The first items to denote is whether your home is on sewer or septic. There is nothing wrong with either system, just planning and inspection that should be done.
    1. If it is on septic get the following answers;
  1. When was it last pumped?
  2. When was it last replaced?
  • Where is it located in the yard. Both the tank and the leach fields.
  1. When was it last inspected and Certified?
    1. New tanks last 50-100 years with many of the materials. While older tanks may only last 20-40. Root intrusion can be a big issue with older tanks.
    2. If there are any signs of problems with the plumbing, Bad smell, backed up pipes, or excessively wet soil or plant growth near tank get it inspected PRIOR TO CLOSING. This can be expensive but it is far cheaper than getting into something you can’t repair without blowing up your deal9
    1. If the property is on sewer you need to look for the following items as well
  1. Where does the sewer connect to the city? This can be done on a title search for the property (a Realtor can help you)
  2. Do you have excessive plant and tree growth through the path that the pipe goes?
  • Are the pipes backing up in the home? When was the last time the pipes were snaked and have they ever been repaired?
    1. If you are dealing with a home that is 50+ years your should ALWAYS camera the pipes prior to closing. This can make or break your deal. The replacement of a city main connection can be costly and very time consuming in the permitting process. ( I have made this mistake many times and it has hurt the transactions and made a great deal a bad one before. Learn from me and my mistakes and do this every time. buying 2 houses and spending $400 on cameras is worth the money considering you will lose 10K-20K on 1 bad deal)

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  1. Is the panel ample for the home. General rule of thumb is a 3 bedroom 2 bath should have about 200 Amps. You can figure this out by opening the electrical panel and counting up the circuit breakers. Most panels will have the information directly on them for you to read. However, I do recommend that you always bring in an electrician to review your panel and verify that any changes you make will be able to be brought up to code. Many old homes do not have dedicated systems for each of the kitchen appliances. In today’s standard this is a must and you will want to make sure you have room for this in your panel. Otherwise it is a costly repair to do at the point of your home inspection!

11

  1. Foundations are the key to money in so many projects and sales. A bad foundation means that a traditional buyer will not be able to finance the home. That means an investor or cash buyer will have to make the purchase in order to sale the home. That means your buyer market is smaller -which means less competition for your property, driving down the price.

 

Now the question is when can you tell if a foundation is bad or when it needs to be looked at. FIRST RULE- IF IT LOOKS LIKE IT IS BAD, GET IT CHECKED BY A PROFESSIONAL. The moment you suspect it get a professional in to check it! Here are some clues to look for;

  1. Cracks in the walls

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    1. Door frames not being square.

13

    1. Crack in front or back of the home in the concrete.

14

    1. Noticeable cracks in the stem walls of the home

15

    1. Windows or doors that are hard to open

16

    1. Sloped floors- You can test this by setting a ball on the floor and seeing where it rolls

17

18

19

    1. The most important thing is to recognize the issue and get it checked out by the professional. Do not estimate what the cost will be, foundations can vary dramatically. The look of the damage does not always correlate with the cost of repair.
  1. This is a value item that will need to be considered in your process. You can not put carpet into a 500K home that is in a neighborhood filled with homes that have wood floors. Vice versa don’t put real wood in a home where no one has carpet. Review your comps and verify what you are looking for and what you will need to do.
  2. Verify the size of your appliances in comparison to your comps. Make the changes that are required to have a great home early in your process and allow for the right size appliances. A kitchen is a HUGE selling point in a home. This is not a place to skimp on items.
  3. When looking for sheetrock repair you need to look for badly affected areas of the home with major wall damage.  Sheetrock is also known as drywall.

 

Another issue with sheetrock might be the replacement of old siding in a home.

Even though the brady bunch loved their wood siding, today’s buyers are not a huge fan of the classical wood siding veneer. Many times that siding is not placed over sheetrock when it is installed.

This means once you remove the siding you will only have the studs behind the siding. It would be worthwhile to see if you can locate a loose piece or a section where you can look behind to see what you are working with.

  1. Other??? What items are common to your area that you need to put in your home. What do your comps have that this home does not have. You will need to weigh this into your decision when you make an offer and when you go to sale. So other items to consider are:
  2. Do you need additional dumpsters?
  3. Do you need to move some walls around?
  4. Are you adding a room or a bathroom?
  5. Do you need outdoor living space created?
    1. Hardscape
    2. Fire pit
  6. Are you re paving a driveway?
  7. This is where the list price of the property is placed or the price that you are starting your conversation with the off market seller is at. It’s your offer price. This is important because you need to be able to arrive at your number and verify that you can combat objections against this price in your offer.
  8. This is where you place the 3 best comps you have for the property. I recommend having this here so that when you go to the property you can take yourself by the 3 comps you have. Sometimes the pictures online don’t tell the truth about what is really there. Always verify your comps prior to closing!
  9. I place this here as a reminder that you need to be checking this everytime you go to a home. One of the first things you should know in a transaction is the type of plumbing system that is in the home!
  10. This is your contingency column, I like to call it my “Oh No” This is for all the stuff that you are not seeing or you are estimating incorrectly in your sheet. This allows you to set a hard number that has some “wiggle” to it if anything comes up.

NOTE- you do not want to be using the money you put in this column in each project. If you are, you need to slow down and do a more thorough inspection the first and second time through!

  1. This is the total of all of the columns that you have put together. This is where you will see what the projected budget is and how you can start the process of creating an offer

Chapter 6: Executive Summary

ee

This is the vision of what you want to happen for your Flip.

You have asked all the questions and you have determined what your property is and can be.

NOW PUT IT ON PAPER.

Most investors in this market leverage others in their projects. That means you need to communicate to others, efficiently, what you plan to create.

This not only gets your investors up to speed and on board to invest.

It also allows you to create guidelines for your contractors and crews! They don’t know exactly what you are seeing in your head, so put it in front of them so you can create a vision, or what is a called an Executive Summary.

Some things to keep in mind when you are putting together your Executive Summary are:

  • What will your home look like in comparison to the comps that you are looking at?
  • Have you taken into account the idea that a certain neighborhood might command different finishes or home layouts?

Things to touch on in your Executive summary are:

  • What is causing the home to be undervalued
  • Does this area command Granite Countertops or can you use a different materials, such as
    • Quartzite
    • Marble
    • Veneers
    • Many different new and exciting options that come to the marketplace everyday
  • Is there multigenerational living
    • Access to bathrooms is key here
  • HOA
    • This can make or break you in certain areas!
  • HIgh Pride of Ownership
    • Is the area on an up or down swing
  • Location location location
    • Walkability
    • Noise
    • Traffic
    • Street presence
    • Neighbors

What does your potential end- buyer look like (who will buy the house after you re-hab it)?

  • First time buyer
    • Safest bet for highest amount of offers.
  • Older couple
    • Kids
    • No Kids?
  • Professionals
    • No Kids
    • Modern
  • Green living
    • Modern living that focuses on green design
    • Open Floor plans
    • Insulation and energy efficient

What is your Exit Strategy?

The Exit strategy is the plan for the property to create cash for yourself and to get the cash for your investors/ partners.

Some items you need to consider when evaluating your exit strategy are:

  • Do you have more than one exit?
    • Rental
    • Sale prior to completion
    • Finish and refinance
    • Lot split or subdivision
  • If the market turns where can you get out of the house with no loss, but no gain
  • How long will this project take?
  • What could impede your progress?
    • Permits
    • Neighbors
    • City construction
    • Major repairs

All of these items need to be addressed and brought to you and your investors attention.
When you create a worst case scenario it allows you the opportunity to lose as little money as possible in a bad situation.

If you always go into a deal and don’t plan for the worst you will eventually get the wrong end of a deal.

This will hurt your business and your development goals.

The following is an Executive Summary I actually created for a property.

You can use these guidelines and this sample to create your own!

Sample Executive Summary

Executive Summary

The property at 123 Main is currently undervalued primarily by its disrepaired septic system which hinders the financeability of the property.  The value is secondarily undervalued by its lack of curb appeal as well as the outmoded bathrooms and kitchen. The property lies in a more desired location for families and retirees.  As such, the location of the property as well as the current lack of inventory in the area drives most of its value.  Based on this notion, the highest grade of materials are not necessary.

Main concerns: Repair septic system using a licensed contractor who can then certify its functionality.

The entry street drops in from above the house’s roof-line. In order to improve curb appeal, it is imperative that we repair the roof and that we blend the style of the home to the roof.  Creating a Cape Cod style home will allow this at the lowest possible cost. Uses of warm pastel colors that blend well with the wood-plank roof as well as opening the visibility of the home will most certainly add value.

As the home boasts great entertaining areas, we would like the new homeowners to feel like they can support their guest’s parking needs. We can achieve this by creating a well defined parking area next to the garage and repairing the now damaged asphalt .

The demographic for this area is primarily older couples with children of driving age on up to retirees. Because of the demographic, a sense of warmth and comfort is desired.  As you enter the home, the clean and defined fireplace fosters this feeling.  Opening up the kitchen wall will further add to the natural flow of someone coming home from a long day of work.  

The kitchen layout is satisfactory for flow and functionality with the removal of the west wall.  The home can be further brightened with white cabinetry and light granite.  The addition of modern appliances will bring the home into the 21st century as this is always a value adding feature.

To not conflict with the style of the exterior, the bathrooms are to be a hybrid of modern fixtures and Cape Cod style finishes. This will be reflected by using primarily light colors and whites.  As in any household, the master bathroom is a focal point for a buyer. Expansion of the master bathroom is necessary to meet minimum desires.  The current “stand room only” shower will not be acceptable to many buyer and does not allow for maximum value on resale, and in fact will remove some buyers completely from purchasing

Less money needs to be spent in bedrooms as they are not the focus of the house. Raising the closets to standard height to make rooms appear larger. Clean neutral finishes to allow family to individualize for themselves.

Rear entry way is currently closed off and uninviting. Must be opened by the removal of the low hanging patio cover allowing light to come in from the backyard and emphasizing its large inviting atmosphere.  Refinishing the deck will give adequate space to homeowner for hosting purposes.

Home should be shown with all window and doors open to emphasize its naturally open flow as well as cookies in the oven to exude warmth and hominess. Parking of agents and partners needs to be restricted to the above street to not highlight the lack of parking in the neighborhood.

Exit strategy:

This home offers one true exit strategy and that is the flip and re-sale model. Due to the location and price point a rental of the property would not be cash positive and would becoming a losing investment for the buyer. Due to this fact the Septic must be fully evaluated at a point that buyer feels confident he can close escrow with no other loose ends.

Anticipated Timeline:

Timeline does contain some variance as the scope of work is not set in stone with the outstanding septic issue needing to be addressed. General guidelines are as such.

Rehab: 6-8 Weeks

Marketing: 8 weeks

Escrow: 6 weeks

Overall we anticipate that we should not go further that 6 months on the entire process from start to finish

Presented By: Andrew Greer

        Partner- Better Tomorrow Group

Chapter 7:Getting Your Offer Price

counter-offer

The creation of your offer requires you to get the Maximum Allowable Offer first.

This is the absolute most you would offer on a property. The MAO can be derived by taking the ARV of the property, multiply that by 75% and then subtract Rehab costs. Here is an example

MAO= (ARV x 75%)- $40,000

ARV= $380,000

Rehab=$40,0000

MAO= ($380,000 x 75%)- $40,000

MAO= $245,000

This is a simple and basic formula. That is why once you have run the MAO I recommend plugging your numbers into the Better Tomorrow Group Deal Analyzer. This allows you to see what your actual terms will be and what your Gross Margin and Cash ON Cash return will be for yourself.

NOTE– Each project is different, and if a project has a lot of “hair” on it you will need to adjust for this in your analysis. A high risk project may be better suited at a rate of 65%-70% of ARV to allow the appropriate amount of coverage.

There is a copy of this in your package as well as the Scope. Please review.

Better Tomorrow Group Deal Analyzer
Property Address: 123 main St, Anytown USA
Date 1/1/2015
Property Description Single family rehab in Anytown, 3 beds 2 baths, View Home
INPUTS
After Repair Value $380,000.00
MLS Value $0.00 Total Square Footage 2048
Estimated Rehab Cost $40,000.00 Prepayment Penalties $0.00
Purchase Price $245,000.00 Selling Recording Fees $200.00
Estimated Hold Time (months) 5 Is the Building Occupied (Y/N) n
First Mortgage or Private Mortgage (% PP) 80.00% *Interest Rate On Internal Capital – has a premium over the cost of money in order to apply a weighted value to a cash heavy (or light) deal

**Financing Origination Costs – This is the rate that your lender provides you for the loan you receive. Hard money has higher rates but works for financing deals that are similar to cash. The rate is set at 3 points on this program

Interest Rate On First Mortgage 12.00%
Second Motgage (%PP) 10.00%
Interest Rate On Second Mortgage 12.00%
Financing Origination Costs** $7,815.00
Estimated Property Taxes $1,276.04
PURCHASE ANALYSIS
Purchase Price $245,000
Esrow Fees° $858
Financing Origination Costs $7,815
Title Insurance°° $1,113
Recording Fees°°° $200
Title Search $250
Total Purchase Price $255,235
First Mortgage 80.00% $196,000
Second Mortgage 10% $24,500
Down Payment $34,735
°Escrow Fees CA- is 4 per 1000 purchase

°°Title Insurance – $500 plus 1/4% of purchase price

°°°Recording Fees – if mortgage origination costs = 0, then recording fees = $100, if mortgage origination costs >0, the recording fees = $200

REHAB ANALYSIS
Estimated Rehab Cost $40,000
ESTIMATED HOLDING COST ANALYSIS
Insurance¹ $1,887
Property Taxes $1,276
Utility Costs¹¹ $750
Financing Costs¹¹¹ $11,025
Total Holding Costs $14,938
¹Insurance – Occupied = $.77/$1,000 + $500 – Vacant = $6/$1,000 + $500

¹¹Utility Costs – are estimated at $175/month

¹¹¹Rehab Holding Costs – are assumed to be incurred for 1/2 of the overall holding period, and are assigned the interest rate on internal capital

PROFIT ANALYSIS
Estimated Gross Sales Price $ 380,000.00
Escrow Fees $858
Realtor Fees 3% $11,400
Transfer Tax 0.12% $456
Home Warranty $425
Recording Fees $250
Net Sales Price $366,612
Total Purchase Price $255,235
Estimated Rehab Costs $40,000
Holding Costs $14,938
Estimate Net Profit $56,439
note: assumes sale on or before 5/31/2015
Cash In $89,673
Anualized Cash on Cash Return 151.05%
Gross Margin 14.85%

Definitions:

Property Description:

What type of property is it. Single Family, Multi family, Condo , Etc. Where is it located and what special features might it have. IE View, beach cottage, cabin, etc. Also the number of bedrooms and bathrooms.

After Repair Value (ARV):

What is the after repair value of the home that you have established in your research of comps. What should the property sale for at the completion of the project

MLS Value:

What is the list price of the home currently listed for. May not be applicable if you are working on an off market transaction.

Estimated Rehab Cost:

This is the value that is created in doing the estimated repairs worksheet.

Purchase Price:

Price you are under contract for purchasing the home

Estimated Hold Time:

This is the time that it will take to complete the rehab of the home, market the property and put the home through escrow and close.

First Mortgage or Private Mortgage (% 0f PP):

This is the amount of money you will be receiving in the first mortgage on the property. This value can be greater than 100% of purchase price if you secure the construction financing as well

Interest Rate on First Mortgage:

This is the rate that your lender is charging you on an annualized basis. This would be the APR.

Second Mortgage (% of PP):

Same as the first but this is the second mortgage instead. Sometime investors procure money from 2 lenders for a transaction. One lender might be the purchase, while the other is the construction cost. Use this column to separate out the values. This mortgage is generally more expensive due to risk and is generally less than the first mortgage

Interest rate on Second Mortgage:

Same as the above section for interest, but for the second mortgage.

Financing and Origination cost**

This is the fee a lender charges for initiating a loan with them. This is generally referred to as the points of a loan. Each point represents 1% and that is a payment of the total loan that is added to the loan value or taken from the overall loan balance.

Example- $100,000 loan with 3 points interest would be either

Loan $100,000x 3 points= Loan value $103,000

or

Loan of $100,000 with 3 points= Net Loan of $97,087.38 and Gross loan of $100,000

Estimated Property Taxes:

These are property taxes paid while the property is owned. They are set at a rate of 1.25% annualized

Total Square Footage

Self Explanatory

Prepayment Penalties

Many loans have a set prepayment period. If your timeline would incur a pre-payment penalty enter that information into this section of the Analyzer.

Selling recording Fees

This is the fee that is charged to record the escrow documents in a transaction. It varies from County to County. As you learn the amount enter this into the analyzer for further accuracy. The number inputted represents an average over my career.

Is the Building Occupied

Enter a Y or N here for further calculation in the sheet below on insurance.

PURCHASE PRICE ANALYSIS

Purchase Price:

This is pulled from the information entered in the above section

Escrow fees:

This is an estimation of what will be paid in escrow fees based on purchase price

Financing and Origination costs:

This is pulled from the information entered in the above section

Title Insurance”

This is an estimation determined off the purchase price of the home

Recording Fee:

This is based of recording fees for escrow. If there are additional lenders fee will increase by $100 on average

Title Search

This is the cost of pulling title on the property

Total Purchase Price

This is a sum of all fees incurred in order to close escrow

First Mortgage and Second Mortgage

These are the percentages and totals from the above information. They will show the monetary value of the loans above

Down Payment

This is the cash you will need to have on hand to close escrow. This number is derived from the amount of your loans and the total closing costs and purchase price of the home.

Rehab Analysis

Estimated Rehab Cost:

This value is pulled from the input in the first section

Estimated Holding Cost Analysis

Insurance:

This number is calculated from the vacancy of the home or the tenants. The overal price of the home and the time period the home will be held for.

Property Tax

This is input from the information in the first section.

Utility Costs:

This is based on the holding period for the home. Over time you will want to adjust this based on projects. A project that has low repairs will use less than a project with high repairs. A Project with a pool or a large yard will incur higher costs than one without either.

Financing Costs:

This is calculated from the information input in the loans above. It takes the total holding period and the value of the loan can calculates out the cost for the project

Total Holding Costs:

Total of all holding costs in this section

Profit Analysis

Estimated Gross sales price:

This is the ARV

Escrow Fees:

Cost to close escrow

Real Estate Fees:

These are the fees that you will be paying the realtors. As the seller you pay the commission for both sides of the transaction. If you develop a relationship with a realtor you can negotiate the listing commission down. I have always used a minimum of 2% for my buying agents, and have paid between 1-2% for listing agents. I will discuss the reasoning behind paying and working with realtors later.

Transfer Tax:

This is the tax that is paid when title changes hands and ownership changes.

Home Warranty:

This is a warranty offered by the seller to the buyer. This is a negotiable point in a transaction but is increasingly common.

Recording Fees:

These are the fees associated with recording the transaction with the County

Net Sale Price:

This is the sales price, less all of the fees incurred in selling the home in escrow.

Total Purchase Price:

This is the purchase price including all fees, escrow and loan origination

Estimated Rehab Cost:

Total Rehab cost

Holding Cost:

Total Holding Cost from the calculations in the Holding Cost column

Estimated Net Profit:

This is the profit after you take into consideration, Purchase Price, Holding Cost, Rehab Cost, and Selling costs. This is what you will make on the deal.

Annualized Cash on Cash Return:

This is the the APR that you make on your money that was invested in the project.

Gross Margin

This is the amount of profit left after you have sold of the home. The Goal is 12+%. If it is better than 12% the cell will be Green. If it is between 8-12% it will be yellow, this means proceed with caution. A large issue could wipe out profits.

Less than 8% the cell turns red. If the gross margin is less than 8% you need to walk from the transaction or go back to negotiate the purchase down on the home.

Chapter 8: Let’s Write an Offer!

20

So it is time to write the offer on your property! How do you write an offer that sticks?

As you can see it takes a village to make something happen. Everyone has their role and everyone has their responsibility!

When you deal with a property that is on the market (MLS), you need a good Realtor to put in the offer on your behalf…Their job is to make sure you get the best possible price for your property.

In the beginning you need to find a good Realtor for your team. Currently I am a Realtor so I handle many of my own transactions.

However, I was not a Realtor when I started investing heavily into real estate. It was an evolution from experience and from opportunity I saw outside of just writing offers.

Anyhow enough on that,  the point of the story is I didn’t always write offers myself. So I leaned on Realtors to help

What was my experience with Realtors?

It was a mixed bag of goods… Some were good, one was great, a few terrible ones, and many mediocre.

In the scheme of things it will be hard to get a Realtor that is as good as myself, not to be cocky, or as good as the guy that taught me more about being a successful Realtor, Chris Cordova.

Now many of you may already know who Chris is. If you don’t know who Chris is here is a synopsis.

Chris and I met a few years back. I was taking foot in the investment community and Chris was building his book of business in the real estate community.

We came from different backgrounds but had the same goal. Invest in real estate and grow wealth!

—Important note here, I didn’t say make money.  Not in it for the quick buck, in it to grow wealth and be successful—

I came from an investment background, so I aligned myself with investors and went straight after property.

Chris was fresh out of college and full of drive and went after the buyers and sellers of real estate to develop his funds for larger transactions.

So BOOM instant symbiosis between. Now I take credit for the relationship but truth be told he cultivated it with his desire and I could not argue with that.

Don’t tell him though, that stays here!

Chris still works with me, in fact we’re partners in one of the several companies I founded, Better Tomorrow Group.

Not to bore you with the  details of how this relationship started but Chris is one of my few trusted partners. I can count those partners on one hand!

So without further ado Chris has offered to write this next section of my book on Writing Offers.

This is how I currently write my own offers as well, but I feel that me relaying the information may not be as valuable- so I have asked him to do it.

So Pay Attention!

In today’s market many houses you go after are going to have multiple offers on them.

Most offers that are sent out are like the following:

Hi- attached is our offer for x amount.

We can close in 30 days with a 17 day contingency period, and my client really wants this house!

Look forward to putting this together with you!

End.

That’s lame.  And quite frankly, if there are multiple offers on the house all around the same price you may not be the winning bid.

To be able to stand out from the crowd, you need to add that little extra something to the mix.

Here is the formula that you need to use or have your Realtor use to “wow” the sellers of the home you want to buy.

Remember the formula:

Q.U.E.S.T

Qualify the reader(seller) to prepare them.- identify problem or tell story they can relate too

Understand the reader by reaching out- you empathize with them and expand the problem

Educate the sellers on why you came up with the price you did- show them how you came up with your price

Stimulate the sellers on why your offer is best (relate to Educate)-

Transition the reader to accept your offer — Tell them again why they should take action on your offer(if you have multiple offers out you want to let them know to get back to you asap)

The following is a real life example.

You can study it and use its structure- just enter in your own info— the markings in red are my notes explaining what I am doing throughout the email

This is a real example:
—Begin—

Dear potential Sellers,

Selling a home can be a difficult, frustrating, time consuming process.  Sometimes you want to pull out your hair, or just plain out start crying.   I have been there.  I represent buyers and sellers all the time, and have even been involved with probate deals where their is a death in the family and brothers and sisters are fighting over money…. not a pretty situation.   

My job as the listing agent in that deal was to make sure the property was sold at the highest and best price for the family.. and in the shortest time possible.  All while dealing with family members who were going through a tough time.  

This is the first part of the Q in the formula. Qualify the reader(seller) to prepare them.- identify problem or tell story they can relate too.  I am relating to them by telling a story — I also touch on U of the formula- understanding what they are going through…

Why am I bringing this up?

Well because, no matter the situation,  (I’m not sure what your situation is)… every seller wants the same thing.  The highest price.  And I get that.  Everyone knows sellers want the highest price, and buyers want the best price.   So now the problem lies in what price do we end up at?

This is the last of the U part in the formula. Understand the reader by reaching out- you empathize with them and expand the problem

The good thing about real estate is that it is tangible and slow moving...

its easy to track because it moves slowly and you can see what similar houses are selling for in your neighborhood.

Your Real Estate Agent has been doing a great job of following up with me and standing firm on your price.   And I get it… you guys want market price.  She even sent me the comparable properties you guys used to determine your market price.

The problem with these comparable properties is that there were no adjustments made.  Your price is based strictly off average sq ft x average price/per sq foot.

Let me explain…..

These were the comparable properties that were sent to me: these are the numbers I ran based on the properties I was sent to establish the price:

  1. OC14015478-601 12th ST, Huntington Beach 92648- sold in May for $850,000 3bd/3.5 ba 1875 sq ft..and that was when the market was doing better

 

  1. OC14096837- 520 19th ST, Huntington Beach 92648 – this one also sold in may but for $890,000- more upgrades and better landscaping, plus closer to the beach – 3bd/3 ba -1830 sq ft – also sold when the market was up

 

  1. OC14044384 – 421 21st ST, Huntington Beach 92648- this one also sold in may when the market was higher-  and this one is way closer to the beach and more upgrades/ landscaping/ private sun deck etc..- 3bd/3 ba- 1997 sq ft-

 

  1. OC14122206- 328 18th ST, Huntington Beach 92648- this one sold in August- when the market was at a different state and it’s almost at the beach.  better upgrades, nicer house over-all- 3bd/3ba- 2400 sq ft- way more sq footage

Now take the averages of all and you get 457 a sq ft x 1900 sq ft (your house) without making adjustments and you get $868,000–

Up to now I have been educating the reader.  Remember  Educate the sellers on why you came up with the price you did- show them how you came up with your price- I even used the comps they provided and said encouraging words about their listing agent solidifying that I Understand why they think their house is worth more.

that’s without adjusting for the half bath on the property, the distance to the beach, the condition of the property compared to others (although yours is very nice house) or taking into account that the market has come down…its almost December.  See for yourself by clicking the link below- again these are the comps you guys provided us….

http://www.mrmlsmatrix.com/Matrix/Public/EmailCMA.aspx?ID=531231

In conclusion if we make adjustments for just the half bath- -$10,000

Then adjust for distance to the beach  which —lets just say -$10,000 to be generous

(we could very easily say -$10,000 to -$20,000 per block closer to the beach–

just those 2 tiny adjustments– not even including all the adjustments we could go through on the house compared to the others-

You would end up at  $848,000 ($868,000 – $20,000) ..

And that is for an even better market than we are in today with the holidays around the corner…so we could adjust more

So my clients offer of $850,000 is actually above market value…  Even in the higher market. You can’t argue with the numbers…that’s the thing about real estate as discussed before

I have continued to Educate them and telling them why we came up with the price we did- I just walked them through how we came up with our price

For the reasons listed above please consider accepting this solid offer–

Its a good offer, a real offer, from a buyer who will perform and we can close this out in just 21 days…and before the end of the year.  They are stretched to their limit on funds, and they are even letting you keep your washer and dryer and putting down 25k within 3 days like you wanted.

Lets get this house sold…that’s why you listed it right?  And you can move onto the next chapter of your family’s life.

I have begun to Stimulate the sellers on why our offer is best (relate to Educate)-

Additionally consider this….

Your alternative is to not accept this offer.  What will happen?

You probably won’t sell your house until February or March… but you might get a higher price…might not also.

Lets pretend you get a higher price.  Say $870,000.   Well you could of sold your house in the beginning of December for $850,000.   

So for 4 EXTRA months you had to pay mortgage, property tax,  utilities, and any other house expenses you might incur- repairs etc…… just to save $20,000.

Let’s break this down:

According to the property tax rolls you bought the property for $725,000 and it looks like you put down around 27%.  Lets call it 25% to make the numbers easy.  This means your mortgage payment is around $3,500 a month for a 30 year mortgage.

$3500 x 4 months = $14,000 + utilities, and any other house expense.  Lets just say you spend $1000 a month on utilities and other misc expense.   That means you will have spent $18,000 on your house for 4 months…. when you could have sold it for $850,000 4 months ago.  You end up making the same!!!

If you go the route of not accepting our offer….Does it make sense to save $20,000 now to spend $18,000-$20,000 over the next 4 months and continue the stress?

The answer is obvious

(Still Stimulating to take our offer and Educating on why our offer is best…..I even walk them through the alternative and discuss why that is not a good option)

Imagine this house sale finally over….

And even before the holidays.  You could enjoy the rest of the Holiday season stress free, and worry free.  Knowing that you start off the new year with a full clean slate…. and move onto the next adventure with your family for 2015.

This is the offer you have in front of you, your agent did her job by bringing a ready, able, and willing buyer to the table…. and we already discussed adjustments to show that you are getting market price (actually a little more) ……Just like you wanted.

We also covered the alternative of not accepting the offer, which did not make any sense…

Now its up to you to accept the offer….

I have transitioned into the T part of the formula.  Transition the reader to accept your offer — Tell them again why they should take action on your offer-  

I even had them envision what it was like to have the sale over.  This is an important step.  You want the reader to envision themselves with the transaction over.. and what it will feel like. Emotions are a strong selling point.

Lets do this thing, all you have to do is sign and we can open escrow on Monday!

I told the seller what they need to do next.. just sign. Re-iterating accepting our offer (T).

Look forward to hearing back from you!

P.S.    meet me:  Meet The buyers agent         meet the buyer: Meet the buyer

As a bonus I add videos so they can see my face and the buyers face.  This is the new version of a letter to the seller from the buyer.  It puts a face to the offer, and allows the seller to see who the person is buying their house.

—–End—-

You see the difference here?

This email took me over 2 hrs to write, but it saved my clients $12,500.   That’s a $12,000 email you just read.

Was that worth 2 hrs?

Yes!  I made $19,000 on that deal.  And without that email the deal wouldn’t have been put together.

All in all you could say that email was worth over $30,000 because it saved my client $12,500 and  it allowed us to put the deal together to earn me my commission (19k).

$12,500 + $19,000 = $31,500

Big Tip

Remember to Add a video to the end of your email introducing yourself and the buyer.

It’s the final touch that is needed.
Use this strategy to stand out from the crowd!

Good luck!

Chris M Cordova

CFO  Better Tomorrow Group

Let us know how it worked for you!  Support@BetterTomorrowGroup.com

 

Chapter 9: Getting the Money for the Deal!

Does-Money-Alone-Make-You-Rich-900x600

 

Time to raise the funds to bring the project together. So what do we have to start

  1. You have an analysis of properties and an ARV
  2. You have an estimate of repairs
  1. Formulated into a scope- This should be getting bid while you are raising cash
  • You have an Executive Summary to explain the vision of the project

Reach out to local Investment Groups and see who is a “Hard Money Lender”

What is hard money you ask?

Hard money are loans that are written against the property itself.

That means a Trust Deed is secured against the property to protect the lenders investment. A few items on Hard Money to consider are:

  • General 60%-80% of the purchase price of the home
  • Generally interest only loans that are short term 6-12 months
  • Higher Origination or “Points” than a standard loan 1-5 points based on the loan type
  • Some lenders will lend on the 60%-80% of purchase and then hold back the cost of construction to pay you in draws as you complete the project

Find out the funding guidelines and send the information into a few Hard Money Lenders. See what you get back and go Apples to Apples.

Items to compare:

  1. Term of the contract
  2. Pre-payment penalty and when it is in effect till
  3. Document fees
  4. Construction draw terms
  5. Points on Loan
  6. Annual Interest rate on loan
  7. Extension of loan terms agreement

Each of these items weighs heavily into how the loan will work. Research your lenders and get referrals. A good lender should have a book of happy clients who they have worked with.

How do I fund the other 20%-40% of the money needed and pay interest?

If you don’t have the funds, and many people do not, to complete a project on your own you will need to partner with someone who will either be passive in the transaction or add to the management as well.

I will always tell people that this is the key to true success in this business.

Doing your first deal and raising capital is very easy if you can demonstrate a level of professionalism and expertise in the process.

In order to sale yourself to investors I have put together a very basic slideshow that I used in the past to raise funds for a small project when I got started.

I slightly modified this for the book to have some of my current information in here. To help you grasp the importance of the slide show below consider this:

This slideshow got me started with a $40,000 loan over 3 years ago. Currently I am working with this same lender on more than one project, and one project alone is over $1,500,000 in their position.

So the basic concept of this is- this is the beginning of how you will grow yourself.

Sale Yourself

Residential Re-Development

Prepared by: Andrew Greer

What is Residential Re-Development

  • Residential Re-Development or “Flipping” is the process of taking undervalued or distressed property and re-creating equity for that property.

Who is Andrew Greer

  • Andrew Greer- Background in personal finance with his degree in Economics from San Diego State University.  Andrew’s focus within the company is financing of deals, project management and final sales. Andrew also has extensive background in Real Estate investment and the construction processes involved in completed a successful transaction for all parties

How I Acquire Undervalued Property

  • MLS
  • Direct Marketing
  • Advertising
  • Online Marketing
  • Social Media
  • FSBO’s

Analyzing deals

  • Determine ARV using MLS/ comparable sales
  • Determine repair costs and scope
  • Create maximum allowable offer “MAO”
  • Use 75% rule vs. Profit analysis

Renovation Process

  • Walk Property and estimate repairs
  • Bring in contractors for walkthrough
  • Review Bid and request full scope of work
  • Review Scope and review contingencies
  • Contract Signing
  • Rehab Project Management
  • Final Punch List
  • ALL WORK PERFORMED BY LICENSED CONTRACTORS

How We Protect Our Investment: 5 Critical Forms for Contractors

  • Independent Contractor Agreement
  • Scope of Work
  • Payment Schedule
  • W-9
  • Unconditional Final Waiver of Lien

Final Sales and Marketing

  • Research Realtors for best fit for property and the market area
  • Provide high quality photo of property for MLS/ online marketing
  • Use Social Media to reach out to potential buyers
  • Use local investment groups to showcase turnkey properties
  • Use Trulia, Redfin, and Craigslist to create more

potential buyers

What is private mortgage lending

  • It is a loan made to a real estate investor that is secured by real estate.
  • Private Loans are given a first or second mortgage (trust deed) that secures the lenders legal interest in the property and secures their investment.
  • Private loans give real estate investors access to cash allowing them to act quickly and thereby acquire better investment opportunities, and in many cases beat out the competition.

How is Your Investment Protected

Documents securing your private loan

  • A recorded mortgage (trust deed) against

the property

  • Promissory note
  • Hazard Insurance
  • Title insurance

Why Partner With Andrew

  • Relationships with realtors and property finders to locate good investment opportunities. Also a licensed Realtor
  • Knowledge of the real estate market and

trends.

  • Ability to quickly analyze and value

investment opportunities.

  • Knowledge base built on first hand experience as CEO of a premier Investment company

This is basic, not rocket science. Be genuine about who you are, what you do and how you are going to work with them.

You are gaining knowledge and information as you read this book.

You will gain so much more as you go to local groups and start going through houses.

 

Chapter 10: Rehabbing!

21

Contractors Suck!

(The Money out of Your Deal!)

After your offer is accepted you are going to have to work with some contractors.

Now let’s be fair, not all contractors suck, but for the most part their job is to get the most out of any property they work on.

The untrained investor would likely pay through the nose for issues that could result in a “major issue” or can’t be solved with a “simple fix.”

Warning: Never be looking to cover up anything in a transaction. In fact covering something up is something you need to run away from faster than any money you can possibly run to- and I mean this!

You are looking to make money long term… You are looking to grow wealth… You are not looking to build an empire and then have an issue at a property that turns your Rome into…well..  Rome!

A strong ethical compass and direction from people like Better Tomorrow Group, and leaders in your community can help you with this.

NOTE- Where there is smoke there is fire! If you sense a lower level of ethics from individuals you are probably correct and should tread carefully.

This does not mean you turn away immediately but you turn your radar on for more issues.

Alright, back on subject. Contractors suck, but how can you work with them and still be productive?

So you don’t know what exactly is going on with a property? Wrong, I have given you some tools to guide your contractors!

Let’s put together the list of repairs you noted and the executive summary and make a package for your contractors to bid.

Now you may have noticed by now that I say, Contractors, not contractor. The reason why I say this is because you can create a fair playing field by having more than one contractor bid a project.

Preferably starting out I would recommend 5 or 6 contractors bid a job.

Won’t the contractors be mad they are bidding against each other?

They might be mad that there are multiple contractors but, in all honesty, you are not out to make friends. You are looking for a competitive Apples to Apples bid.

You provide the playing field and opportunity to see who shows up and what they offer.

Any contractor that tells you this is out of the ordinary is someone that you don’t want to work with.

A truly good contractor will be willing to work with you to get the job done. Not just charge you an arm and a leg without trying to work through the issue with you.

How can you find contractors?

There are many forums for finding contractors that are available to the public. You can go to local meetings for real estate investment. You can find these by

  • Google search your City or County for “ Real Estate Investment Clubs”
  • Meetup.com
  • Pop your head into work sites you see for Flips when you are out on the town. I have found some of the best guys I have worked with this way.

You can also use the web to find them or to request them. A few options are

  • Craigslist
  • Angielist.com
  • Thumbtack.com

You can either post what you are looking for on these sites or you can review posts of contractors and see who you like. Now create a list of contractors and organize.

So you have found the contractors, now what?

Once you have found them it is now time to start vetting them. Here are some important things to do.

  1. Get their licensing information
  1. Verify with the licensing agency
  2. Review their history for complaint
  • Get their insurance information
  1. Verify it is active
  2. Verify they have the minimum coverage for your state and issues you may have. I always recommend at least 1 Million in coverage
  • Get References
  1. Contact the references and ask about the work they performed
  2. Remember these should be the best people they have worked with, so a good review should be expected.

One thing you may notice is in the list is you need to get their licensing information. The reason you do this is because you need to be working only with licensed contractors.

Many flippers out there use unlicensed contractors on their flips, and can have great success with them. However this is one thing that can set you up for financial ruin because things happen like:

  1. Unlicensed and uninsured injury on your property.
  1. That rolls straight back to you. It could cost much more than just your profits.
  • Negligent repairs
  1. Faulty repairs can haunt you and create a financial ruin for you in the future. This is a major NO NO!
  • No governing agency
  1. One of the best ways to get taken for a ride is to bring in a professional that is not under a governing agency. What recourse do you have against a contractor that does not have a agency to report back to. If he takes your money and doesn’t finish the job, you are out of luck!

These are only a few of the reasons why you use license contractors, and I want to stress the importance of this.

I know many guys who have gone UNDER because they tried to save a few thousand dollars on one deal and it cost them Hundreds of Thousands!

This is no joke, if you want to go unlicensed with your team PROCEED WITH CAUTION!

You have your list of vetted contractors and set time for walk throughs- Time to prep for the walk through.

A walkthrough is when you walk through a property with a contractor so they can give you a bid on how much they will charge you for their work.

Here is a checklist of items to do to be ready

  • Create a scope of work from the estimate of repairs sheet. This will state what you found in the estimate of repairs and you will give this to your contractors.
  • Make copies of the Executive Summary for the contractors to review so they know your vision for the project
  • Setup the appointments for each contractor to be about 30 minutes apart. This allows you to get the contractors in the house in a short period of time. As well as making them aware that there are other contractors bidding against them
  • Take a measuring tape and a camera
    • Generally I will measure rooms for myself while the contractor does their walk through. This is good for future reference when you are ordering your material.
  • Bring a camera and snap more pictures! You will be surprised what you find on this trip in comparison to the previous. You will find more items you may or may not want to fix or upgrade.

Bids, Bids, Bids

The bids have come in and the prices are on paper. Now it is time to make sure the bids are Apples to Apples. Start here:

  1. Print each bid up
  2. Grab your Scope of Work and your Executive Summary
  3. Start reviewing each bid to make sure each item is included
  4. Highlight each item from the list as you got through. This allows you to verify you checked it off the list
  5. Note any items not included
  6. Note areas with Allowances, verify if the allowance makes sense. If it is too good to be true find out what is missing.

Example- a tub may have an allowance that seems more than ample, say $800. You look online and find a tub for $500, that is a savings of $300!

But wait, does that include the faucets and the drain- Does it include the connection to the plumbing? Was your contractor tacking on the price of fixtures in the Tub section?

Ask these questions, and verify. Don’t take face value if it doesn’t make sense.

After you have reviewed each of the bids, start comparing them for value. Look to see who is less in certain areas and who is more expensive.

Someone may be be higher in all areas, and sometimes contractors have certain items they bid higher than others. Take notes and it is time to make some calls.

Time to choose the ONE!

First things first, make sure you are calling the contractors that you have some level of rapport with from the walk through. If you don’t like someone, don’t work with them.

Contractors are a major part of the project, and you need to be able to work through issues with them and negotiate items out.

They will be your partner for the next month or more, so you need to be able to work together.

When you make your call review the items of concern on your bid with the contractor like:

  • Items that are more expensive
  • Items not included
  • Items they added (A good contractor will add items that they see as a possible issue beforehand)
  • Allowances that don’t match

Once you have a clarification on your concerns it is time to ask for a discount. This is difficult for many people to do, and if it is for you think of it this way:

What if I met you for the first time and put my hand in your pocket to take money out?

Would you just let me take that money and not say anything because it would feel awkward or uncomfortable for you? I am hoping the answer is NO. In this situation all you need to do is remember that.

Now I am not going to tell you how to negotiate but I will give you one tool that always wins.

SILENCE!

That is really all you have to do. Make a proposition and an offer and then wait for them to talk. Even if it takes an eternity. The first person to speak sets the playing field for the negotiation.

If you have no negotiation skills I recommend doing some reading on the internet or find a local group that offers classes. Negotiation is not a one size fits all deal, it is a fluid art that you have to find your niche in.

You have Negotiated price and you have chosen your Contractor

It is time to sign the contract and to get the project set to roll.

First make sure the change in price is in the contract and you are ready to go on the new price. Second verify with the local licensing board what contract they recommend and what to look for.

Each State will have different laws to protect consumers. Find out what your rights are and use the contract they recommend.

Sign the contract and schedule the start for immediately after close of escrow.

So you have the deal, and you are about to close escrow. Now what…

You made the offer, you closed escrow and you have the property, now what?

Well hopefully you have done everything in the prior chapters from getting your estimate of repairs to hiring your contractor to do the work at your property.

Next, I am going to give a synopsis of items.

This, like many other parts overlaps with other areas and requires you to complete more than one task at a time.

As you review this you will see items you are aware of as well as items that are new.

  • Phase 1: Pre-Construction
    • Utilities and Insurance– Set utilities up for the property so when your contractors arrive day one they can start. Insurance is something you always need prior to start. Generally lenders will have you get it prior to closing escrow on the property.
    • Property Walkthrough- Walk of property with contractors to get bids on the property.
    • Scope of Work and Material Lists- Create as stated in area below
    • Collect Bids and Award Jobs- Review bids and hire the contractor
  • Phase 2: Scope of Work
    • Contract Stage- Solidify terms of contract with the hired contractor. This is an important portion of any project and protects you and the contractors
    • Permits- Pull associated permits that are required for your flip. I ALWAYS have my contractor pull the permit. This allows their license and insurance to carry liability for the work completed. This is one of the reasons you are using a licensed contractor. Do not be tricked into pulling your own permit.
    • Create scope from your initial property walkthrough estimate repairs sheet- Self explanatory
    • Kitchen, Bathroom layout and Floor Plan- Create the vision and design it with your contractor. Should be based on the executive summary. I always write important information for my contractor down so there is no loss in translation
    • Material list- Create this with your contractor based on what is created in the scope. Any items you are providing need to be outlined clearly so you can get the appropriate materials
  • Phase 3: Construction
    • Demo and Cleanout- Get the home down to its basics and clean it out so the construction can start. Cleaning out trash will allow you to see what is actually there and give you a perspective on any changes you may consider based on new information
    • Self Progress Inspections- This is a walk through with the contractor. I generally tie these with construction draw payments. I set the schedule with the Contractor in the contract. This way they will know when they get paid and what they have to do to get paid.
    • Building Inspections- These are arranged according to what your contractor has scheduled at the beginning of the project and when the inspections can be arranged with the City
    • Final Walkthrough/ Punch list- This is a final walk through to make sure all work is complete. I have attached a used punch list you can use as a template. There is also one in your packet.
    • Cleaning- Turn the construction job site into a clean site. You will want to thoroughly clean everything so you can stage.
    • Staging- Bring the furniture in and get that property ready to go to market
    • Cleaning- Now that you have put the furniture in the home you need to do a once over to make the entire property crisp and pop for the potential buyers that will be coming through

 

Punch List
Room / Location Trade Item to check Work needed/

Completed

KITCHEN
Kitchen Appliance Garbage disposal working properly Complete
Kitchen Appliance Stove has gas/power & turns on Complete
Kitchen Appliance Oven has gas/power & turns on Complete
Kitchen Appliance Range hood working properly Complete
Kitchen Appliance Refrigerator is cold & working properly Complete
Kitchen Appliance Dishwasher is connected to water & working properly Complete
Kitchen Carpentry Cabinets are aligned and level Complete
Kitchen Carpentry Cabinet doors and drawers open and close smoothly Complete
Kitchen Carpentry Drawer pulls and knobs are level and centered Complete
Kitchen Carpentry Windows/doors open & close properly Complete
Kitchen Carpentry Notes for above section
Kitchen Carpentry Sink(s) installed properly with no dents Complete
Kitchen Plumbing Water is flowing well at faucets with hot and cold water Complete
Kitchen Plumbing Faucet handles and pull out faucet heads working smoothly Complete
Kitchen Countertop Countertop looks good and is undamaged
Kitchen Electrical All outlets working properly with GCFI circuit breakers installed Complete
Kitchen Electrical Lights and switches working properly Complete
Kitchen Electrical Notes for above section
Kitchen Electrical Smoke detector installed and working Complete
Kitchen Flooring Floor is smooth, even, and aligned properly Complete
Kitchen Paint Walls & paint look clean with no lumps, smudges or discolorations Complete
Kitchen Paint Notes for above section
Kitchen Tile For tile floors, grout and tile spacing is even with no cracks Complete
Kitchen Tile Backsplash is installed evenly with no cracks Complete
Kitchen N/A NOTES Notes 1
Kitchen N/A NOTES Notes 1
LIVING ROOM
Living Room Paint Walls, ceiling & paint look clean with no lumps or discolorations Complete
Living Room Paint Notes for above Section
Living Room Electrical All outlets are working Complete
Living Room electrical Outlets-1 none
Living Room Electrical Outlets-2 none
Living Room Electrical Outlets-3 or more
Living Room Electrical All light fixtures & switches are working Complete
Living Room Electrical Lights -1
Living Room Electrical Lights-2 none
Living Room Electrical Lights- 3 or more none
Living Room Carpentry Windows open, close and lock properly Complete
Living Room Carpentry Window-1 none
Living Room Carpentry Window-2 none
Living Room Carpentry Window-3 none
Living Room Carpentry Window- 4 or more none
Living Room Carpentry Doors open, close & lock properly with functioning door stops Complete
Living Room Carpentry Notes for above Section none
Living Room Flooring Floor is clean, undamaged and looks good
Living Room N/A NOTES
Living Room N/A NOTES
DINING ROOM
Dining Room Flooring Floor is clean, undamaged and looks good Complete
Dining Room Paint Walls, ceiling & paint look clean with no lumps or discolorations Complete
Dining Room Paint Notes for above Section none
Dining Room Electrical All outlets are working Complete
Dining Room Electrical Outlet-1 none
Dining Room Electrical Outlet-2 none
Dining Room Electrical Outlet-3 or more none
Dining Room Electrical All light fixtures & switches are working Complete
Dining Room Electrical Light 1- none
Dining Room Electrical Light-2 none
Dining Room Electrical Light-3 or more none
Dining Room Carpentry Windows open, close and lock properly Complete
Dining Room Carpentry Windows-1 none
Dining Room Carpentry Windows-2 none
Dining Room Carpentry Windows-3 or more none
Dining Room Carpentry Doors open, close & lock properly with functioning door stops Complete
Dining Room Carpentry Notes for above Section none
Dining Room N/A NOTES notes 1
Dining Room N/A NOTES notes 1
BEDROOM s
Master Bedroom Carpentry Closet doors, poles & shelving installed properly Complete
Master Bedroom Flooring Floor is clean, undamaged and looks good Complete
Master Bedroom Electrical All outlets are working Complete
Master Bedroom Electrical What outlets are not working-Notes for above
Master Bedroom Electrical All light fixtures & switches are working Complete
Master Bedroom Carpentry Windows open, close and lock properly Complete
Master Bedroom Carpentry Notes for above section none
Master Bedroom Carpentry Doors open, close & lock properly with functioning door stops Complete
Master Bedroom Paint Walls, ceiling & paint in room and closet look clean with no lumps or discolorations Complete
Bedroom(2) Carpentry Closet doors, poles & shelving installed properly Incomplete
Bedroom(2) Flooring Floor is clean, undamaged and looks good Incomplete
Bedroom(2) Electrical All outlets are working Complete
Bedroom(2) Electrical What outlets are not working-Notes for above none
Bedroom(2) Electrical All light fixtures & switches are working Complete, test
Bedroom(2) Carpentry Windows open, close and lock properly Complete
Bedroom(2) Carpentry Notes for above section none
Bedroom(2) Carpentry Doors open, close & lock properly with functioning door stops Complete
Bedroom(2) Paint Walls, ceiling & paint in room and closet look clean with no lumps or discolorations Complete
Bedroom (3) Carpentry Closet doors, poles & shelving installed properly Complete
Bedroom (3) Flooring Floor is clean, undamaged and looks good Complete
Bedroom (3) Electrical All outlets are working Complete
Bedroom (3) Electrical What outlets are not working-Notes for above none
Bedroom (3) Electrical All light fixtures & switches are working Complete
Bedroom (3) Carpentry Windows open, close and lock properly Complete
Bedroom (3) Carpentry Notes for above section none
Bedroom (3) Carpentry Doors open, close & lock properly with functioning door stops Complete
Bedroom (3) Paint Walls, ceiling & paint in room and closet look clean with no lumps or discolorations Incomplete
Bedroom (4) Carpentry Closet doors, poles & shelving installed properly Complete
Bedroom (4) Flooring Floor is clean, undamaged and looks good Complete
Bedroom (4) Electrical All outlets are working Complete
Bedroom (4) Electrical What outlets are not working-Notes for above none
Bedroom (4) Electrical All light fixtures & switches are working Complete
Bedroom (4) Carpentry Windows open, close and lock properly Complete
Bedroom (4) Carpentry Notes for above section none
Bedroom (4) Carpentry Doors open, close & lock properly with functioning door stops Complete
Bedroom (4) Paint Walls, ceiling & paint in room and closet look clean with no lumps or discolorations
Bedrooms N/A NOTES notes 1
Bedrooms N/A NOTES notes 1
BATHROOM’s
Master Bathroom Carpentry Mirror(s)/medicine cabinets) are level and correctly placed Complete
Master Bathroom Carpentry Cabinets are aligned and level Complete
Master Bathroom Carpentry Notes for above section none
Master Bathroom Carpentry Towel bars/ towel rings straight and correctly placed Complete
Master Bathroom Carpentry Cabinet doors and drawers open and close smoothly Complete
Master Bathroom Carpentry Notes for above section none
Master Bathroom Carpentry Drawer pulls and knobs are level and centered Complete
Master Bathroom Carpentry Windows/doors open & close properly Complete
Master Bathroom Carpentry Notes for above section none
Master Bathroom Electrical All outlets working properly with GCFI circuit breakers installed Complete
Master Bathroom Countertop Sink installed with no chips or cracks Complete
Master Bathroom Countertop Countertop looks good and is undamaged Complete
Master Bathroom Carpentry Toilet paper holder level and correctly placed Complete
Master Bathroom Plumbing Toilet flushing properly Complete
Master Bathroom Electrical Lights and switches working properly Complete
Master Bathroom Electrical Ceiling vent working properly Incomplete
Master Bathroom Plumbing Shower/Tub water flowing well with hot and cold Complete
Master Bathroom Plumbing Water is flowing well at faucets with hot and cold water Complete
Master Bathroom Plumbing Faucet handles working smoothly Complete
Master Bathroom Plumbing No leaks at faucets or shower head Complete
Master Bathroom Tile Shower/tub tile straight, even, uncracked with clean grout Complete
Master Bathroom Tile Floor is smooth, even, and aligned properly Complete
Master Bathroom Tile On flooring tiles grout and tile spacing is even with no cracks Complete
Master Bathroom Paint Walls & paint look clean with no lumps, smudges or discolorations Complete
Bathroom (2) Carpentry Mirror(s)/medicine cabinets) are level and correctly placed Incomplete
Bathroom (2) Carpentry Cabinets are aligned and level Complete
Bathroom (2) Carpentry Notes for above section none
Bathroom (2) Carpentry Towel bars/ towel rings straight and correctly placed Complete
Bathroom (2) Carpentry Cabinet doors and drawers open and close smoothly Complete
Bathroom (2) Carpentry Notes for above section None
Bathroom (2) Carpentry Drawer pulls and knobs are level and centered Complete
Bathroom (2) Carpentry Windows/doors open & close properly Complete
Bathroom (2) Carpentry Notes for above section None
Bathroom (2) Electrical All outlets working properly with GCFI circuit breakers installed Complete
Bathroom (2) Countertop Sink installed with no chips or cracks Incomplete
Bathroom (2) Countertop Countertop looks good and is undamaged Incomplete
Bathroom (2) Carpentry Toilet paper holder level and correctly placed missing
Bathroom (2) Plumbing Toilet flushing properly Incomplete
Bathroom (2) Electrical Lights and switches working properly Complete
Bathroom (2) Electrical Ceiling vent working properly Complete
Bathroom (2) Plumbing Shower/Tub water flowing well with hot and cold Incomplete
Bathroom (2) Plumbing Water is flowing well at faucets with hot and cold water Complete
Bathroom (2) Plumbing Faucet handles working smoothly Complete
Bathroom (2) Plumbing No leaks at faucets or shower head Complete
Bathroom (2) Tile Shower/tub tile straight, even, uncracked with clean grout Incomplete
Bathroom (2) Tile Floor is smooth, even, and aligned properly Complete
Bathroom (2) Tile On flooring tiles grout and tile spacing is even with no cracks Complete
Bathroom (2) Paint Walls & paint look clean with no lumps, smudges or discolorations Complete
Bathrooms (3) Carpentry Mirror(s)/medicine cabinets) are level and correctly placed Incomplete
Bathrooms (3) Carpentry Cabinets are aligned and level Incomplete
Bathrooms (3) Carpentry Notes for above section none
Bathrooms (3) Carpentry Towel bars/ towel rings straight and correctly placed Incomplete
Bathrooms (3) Carpentry Cabinet doors and drawers open and close smoothly Complete
Bathrooms (3) Carpentry Notes for above section None
Bathrooms (3) Carpentry Drawer pulls and knobs are level and centered Incomplete
Bathrooms (3) Carpentry Windows/doors open & close properly Incomplete
Bathrooms (3) Carpentry Notes for above section None
Bathrooms (3) Electrical All outlets working properly with GCFI circuit breakers installed Incomplete
Bathrooms (3) Countertop Sink installed with no chips or cracks Incomplete
Bathrooms (3) Countertop Countertop looks good and is undamaged Complete
Bathrooms (3) Carpentry Toilet paper holder level and correctly placed Incomplete
Bathrooms (3) Plumbing Toilet flushing properly Incomplete
Bathrooms (3) Electrical Lights and switches working properly Complete
Bathrooms (3) Electrical Ceiling vent working properly Complete
Bathrooms (3) Plumbing Shower/Tub water flowing well with hot and cold Incomplete
Bathrooms (3) Plumbing Water is flowing well at faucets with hot and cold water Complete
Bathrooms (3) Plumbing Faucet handles working smoothly Incomplete
Bathrooms (3) Plumbing No leaks at faucets or shower head Incomplete
Bathrooms (3) Tile Shower/tub tile straight, even, uncracked with clean grout Complete
Bathrooms (3) Tile Floor is smooth, even, and aligned properly Incomplete
Bathrooms (3) Tile On flooring tiles grout and tile spacing is even with no cracks Complete
Bathrooms (3) Paint Walls & paint look clean with no lumps, smudges or discolorations Incomplete
Bathrooms N/A NOTES NOTES
Bathrooms N/A NOTES NOTES
HALLWAY
Hallway Flooring Floor is clean, undamaged and looks good Incomplete
Hallway Paint Walls, ceiling & paint look clean with no lumps or discolorations Incomplete
Hallway Electrical Outlet-1 Complete
Hallway Electrical Outlet-2 none
Hallway Electrical Outlet-3 none
Hallway Electrical All light fixtures & switches are working Complete
Hallway Electrical Light-1 none
Hallway Electrical Light-2 none
Hallway Electrical Light-3 none
Hallway Misc. Hall closets are painted and in good order Complete
Hallway Misc. Notes for above Section
Hallway N/A NOTES Notes
Hallway N/A NOTES Notes
GENERAL
General Electrical Smoke & carbon monoxide detectors working properly Incomplete
General HVAC heater working properly Complete
General HVAC air conditioner working properly Compelte
General Plumbing hot water heating properly Incomplete
General General Contractor Warranties, manuals and maintenance info explained and provided Complete
General N/A NOTES notes
General N/A NOTES notes
Exterior
Exterior Work Paint Exterior Paint Incomplete
Exterior Work Paint Exterior Paint Trim
Exterior Work Carpentry Window Screen Complete
Exterior Work Carpentry Gutters Complete
Exterior Work Roof Roof General Condition Complete
Exterior Work Carpentry Address Numbers on Exterior Complete
Exterior Work Misc. MISC
Exterior Work Electrical Lights Not Working
Exterior Work Carpentry Fencing Incomplete
Exterior Work Carpentry Fencing Additional Notes In good Condtion
Exterior Work Misc. Notes Incomplete
Exterior Work Misc. Notes notes
Garage
Garage Carpentry Doors Working
Garage Electrical Lights Not Working
Garage Electrical Door Sensors Working
Garage Carpentry Ventilation Not Working
Garage Carpentry Door Locks Working
Garage Misc. Notes 1 notes
Garage Misc. Notes 2 notes
Outdoor Living
Landscape Yard Grass Alive
Landscape Yard Plants Dead
Landscape Concrete Clean, Dirty, In Need of Repair- General Condition Dirty
Landscape Plumbing Sprinklers Working
Landscape Plumbing Sprinkler System Clock Not Working
Landscape Plumbing Hose Bibbs Working
Landscape Yard Trees- In need of Trimming, General Information notes
Landscape Misc Outdoor Feature #1 Complete
Landscape Misc Outdoor Feature #2 Not Complete
Landscape Misc Notes #1 notes
Landscape Misc Notes #2 notes
Pool and Spa
Pool Carpentry Fencing In need of Repair
Pool Electrical Pumps Working
Pool Electrical Heater In need of Repair
Pool General Finishes Working
Pool Electrical Lights Working
Spa Carpentry Fencing In need of Repair
Spa Electrical Pumps In need of Repair
Spa Electrical Heater In need of Repair
Spa General Finishes Working
Spa Electrical Lights In need of Repair
Misc. Misc. Notes notes
Misc. Misc. Notes notes

 

**This is a lot of information, but it is all important. One thing to remember is no two flips are alike. You will have additional items you need in some projects.

Chapter 11: Selling Your House

dd

Marketing the Property: Get a “Real” Realtor

Now your property is ready to hit the market. It is time to get a realtor to sell it for you. I always recommend starting with your realtor well before the project is done.

Find a Realtor who is:

  • Able to work with investors- they need to know this is not an emotional transaction. It is a transaction about dollars and cents.
  • Familiar with the area and has clients that are both selling and buying in the area. Getting variable commission for your agent might mean you can reduce your costs and get a good offer from your Realtor
  • Flexibility in commission, this does not mean cheap though. A lesson I always teach is that you generally get what you pay for. If an agent will work for nearly free, they probably aren’t valuing what they do.
  • Able to stop by the project during the rehab to give you insight on the home and what they are seeing sell in the area

 

Acing Your Appraisal

6.2 Many homes require an Appraisal Contingency to be released in order to close the property. So it is important when you are selling your finished project to make sure your home appraises for the value you are under contract for, or for it to appraise at the price of your ARV.

So how do you make sure you ace your appraisal….

Here are some up-front ideas

  • Accent the nice features of the home
    • Views
    • Finishes
    • Landscape
    • BE comparable! Being too different can hurt value negatively
  • Know your hard negatives up front
  • Verify differences in comps and your house
    • Is it on a busy street
    • Is it on a cul-de-sac
    • HOA vs No HOA
    • Know these items!

You are in escrow and it is time to get the property appraised, what can you do…

  1. Make sure your Realtor switches the MLS to “call for access” to ensure you know when the appraiser will be there
  2. Prepare a series of the best comps you have in the area for the appraiser
  3. Have your Realtor greet the appraiser at the property. Turn the prepared list of comps over to the Appraiser. Let them know these are some of the properties you have seen in the area that could be considered comps.
  4. Don’t be pushy! The appraiser will make their own valuation of the property, that said a little help given to them can’t hurt your case.
  5. Leave copies of other offers you have at or near the contract price. Black out any personal information, but show the appraiser there were multiple people offering on the home at the price stated. Therefore it must be market.
  6. If your appraisal comes back poorly, you can rebut the appraisal and ask it to be reassessed. Each type of loan has a different process for it and it can be extensive and time consuming. However a strong case can be won in a rebuttal.

Extras to help you ACE the appraisal

  • Budget for staging and put it in the home. It changes the presence for the appraiser when he walks through. Not to mention this raises the value to potential buyers
  • Clean homes appraise higher than dingy and dirty homes.
  • Make sure the basics of construction are in place for the appraisal
    • Water heater straps installed
    • Carbon monoxide and fire detectors installed
    • Utilities on
  • Property Flyers in the home. These can be helpful for the appraiser to verify information

In the scheme of things you should have no problem with the appraisal if you have made ARV decisions that were appropriate up front. These little extra’s can be the difference of $10K-$15K in a homes sales value. In some cases it may even be higher than that!

Here is an example comp sheet.

I would use this as something that can be left with appraiser. This is one I did for a property. It ended up appraising higher than CONTRACT PRICE! Take a look

asdasdasdasdasd Ct. Sun City, CA 92586 COMPS

http://www.redfin.com/CA/Sun-City/djfjfjfajjdjjdjdjdjdd-92586/home/9484583

3 / 2 1454 sqft. Built 1980

29656 McGalliard $205,000 3 / 2.5 1546 sqft

Rehabbed – newer build 1993

We can drive this price because:

  • Original aluminum windows were not replaced
  • no curb appeal aside from new paint
  • Backyard plain
  • two stories is less attractive and shrinks market size
  • old cabinetry was used in kitchen and bathrooms / only new stove and granite
  • Listed and sold in 43 days… listed at $194,900 and pushed up to $205K
  • Sale closed last week

http://www.redfin.com/CA/Sun-City/29656-Mcgalliard-Rd-92586/home/5298192

29512 McGalliard $170,000 4 / 2 1417 sqft

Bank owned rehab – Priced to sell

We can beat this price because:

  • The property was priced to sell as NSP Down Payment Assisted Sale (up to $40K)
  • A bank rehab / minimal rehab
  • Sold in September – old comp

http://www.redfin.com/CA/Sun-City/29512-Mcgalliard-Rd-92586/home/5297829

29768 Oakbridge Dr. $175,000 3 / 2 1086 sqft – Pool

Not Rehabbed

We can beat this price because:

  • 400 sqft smaller
  • not updated – kitchen original but painted cabinets
  • Listed and sold in 23 days
  • priced at $165K and pushed to $175K

http://www.redfin.com/CA/Sun-City/29768-Oakbridge-Dr-92586/home/5299014

29572 McGalliard Rd. 3 / 2.5 $182,000 1546 sqft – Pool

Rehabbed

We can beat this price because:

  • only new carpet and paint – minimal rehab
  • Minimal curb appeal
  • Sold in May – Sept last year
  • Went pending $2K above list price in 4 days

http://www.redfin.com/CA/Menifee/29572-Mcgalliard-Rd-92586/home/5297847

Closing statement on Flips

I want to thank you for reading this book and taking a step to become a self sufficient Real Estate Entrepreneur.

There truly is a TON of information in this book, and I hope you are excited to use the tools I have provided. With all of this said, you are only scratching the surface of Real Estate Investing. There is so much more that I NEED to pass on to you.

That is why my Partner, Chris Cordova, and I have started Better Tomorrow Group.

At the Better Tomorrow Group we teach people how to wake up from the consumer mindset and grow wealth through real estate, education and connections…but more on that in a second…

As a last note here are some pictures of projects I have completed in companies.

 I hope you enjoy them and they can motivate you to do the same.

 I have a high level of pride in my work and I hope you will too!

26

27

28

29

This one below was one of the first properties I ever did, they have not all been beautiful amazing “landmark” properties. However they have all taught me something that I have taken forward to the next one and have passed on to you today!

 

30

They were all valuable lessons and made me money, whether I made it on that house or on a lesson I learned doing a house.

 

Chapter 12: How to jump start your Real Estate business in your pajama’s

31

If you don’t want to flip houses or go further in Real Estate Investing, go ahead and skip this section of the blog.

For those of you that are serious about flipping houses, and real estate investing it’s now time for arguably the most important part of this book.

You officially know how to find a deal.

You officially know how to analyze a deal

And

You officially know how to rehab a deal—

You know how to flip a house!

… at least in theory

Now you’re ready, prepared, and able to achieve success. You have your foundation.

Are you ready to find out how you can flip your first house in the next month to 6 months and get all the tools, systems, and scripts you need from the comfort of your living room?

You see I was where you are- at one time.

I was broke, motivated, knew what needed to be done but couldn’t even put food on the table.

I was leveraged to the maximum and struggling just to keep my stomach full, let alone find deals.

I was angry, frustrated, and didn’t know if I was going to be able to pay rent the next month.

Flash forward… 6 years and I am running an international business as well as running a successful real estate investment company, real estate finance company, representing clients in their real estate transactions…and much more.

My goal is to help you get to where I am (money wise) even quicker, and get rid of a lot of heartache and growing pains that I went through on my journey to success

You are getting a shortcut….

Before we jump into what exactly this is I need to ask you something….

Do you believe in yourself?

Are you committed to changing your life for the better?

Will you do whatever it takes to design the life you dream of?

After all… it’s not just about thinking and knowing “how to do something in theory”…it’s about actually doing it.

If you are serious about Real Estate investing, would you be willing to spend $20,000 on an education that can make you $50,000 in the first year?

How about $10,000 to make $50,000?

What about $5,000 to make $50,000?

I think we all would spend $5,000 to make $50,000

If you’re not willing to spend $5,000 to make $50,000 you can go ahead and stop reading this book because there is no helping you.

What am I getting at?

We have created a place that has everything you need to succeed in real estate at the click of a mouse:

All your video lessons are in one place.

All you marketing materials are in one place.

All your campaigns are in one place.

All your systems, formula’s, contacts, scripts and everything else you need are in one place.

And the best part is all you need is an internet connection.

We have literally handed you the keys to EVERYTHING we know, and said “Here you go”….

You don’t need to have any experience.

You don’t need to know how to market.

You don’t need more than $5,000.

We will show you how to do EVERYTHING.

This is the most comprehensive all –inclusive Real Estate training package on the planet. PERIOD.

It’s called the Better Tomorrow Group VIP ACCESS .

Now remember when I asked you if you would you be willing to spend $5,000 or less to make $50,000 or more per year?

Well the reason I asked you that is because this education ONLY costs you $995 to get started.

In fact- Here are 7 interesting facts about this platform:

  1.    It’s less than $2.73 a day in the first year with a 6-Month Guarantee – other coaches won’t put their money where their mouth is. Get your first flip in 6 months or your money back!
  2.    You have LIFETIME access so you can come back at anytime to see the latest strategies we are using –we are ACTIVE investors- so like the markets, our strategies change over time.
  3.    All experiences are welcome from Beginners to Pro’s.-  The program offers courses and opportunities for ALL experience levels.
  4.    You do NOT need a Real Estate License
  5.    We provide you with the systems, scripts, and ALL the other tools you need to be successful
  6.    You have access to the latest systems we use- We are ACTIVE in the market and will continue to be- giving you the most up to date strategies NOT what worked 3, 5, or 10 years ago. We are here to teach you how to make money in real estate right now, tomorrow and 10 years in the future. While some coaches are “set up a product and forget it”…we constantly update our systems and strategies.
  7. Additionally members have access to other like minded Entrepreneurs so they can build their own teams!

There are also many benefits to this platform…

Here are the 5 main ones:

  1. You have instant and constant access- no waiting for your content in the mail, and  you can learn from anywhere you have internet access (phone, tablet, computer) !
  2. Everything is in 1 place- no scouring all over the internet, though books, audio tapes, cd’s and software. Just login and everything you need is at your fingertips.
  3. We provide you with the funds for the deals – You do NOT need your own money for transactions- we have funding for your deals set up- your credit and income don’t matter!
  4. We show you where to find hidden motivated seller markets– this is where you find your flip deals!
  5. You Have direct access to our contact database- Real Estate is a team sport. And our team is full of A-Players.   We give you access to our team.  Remember “Your network is your networth”

These are only a few of the many facts and benefits of this program.   The barrier to entry in Real Estate investing has never been so low.  We have made this so easy for you to jump in!

This is a lifetime based platform, and it’s not a stagnant product (it’s constantly evolving as we evolve our strategies with the market).

Our competitors charge in the $25,000 to $50,000 for the same education.  

That means you could be a member for more than 40 years with us and you still wouldn’t pay as much as you do with these other coaches, and on top of that you would be getting constantly updated material!

We would rather you spend that kind of money on marketing!

So why are we doing this?

We have a bigger vision.

We are building a following-to build something even bigger than just this program.  

We want to get you started with making money in Real Estate, and literally break down the barrier to entry so it’s non-existent (anyone can come up with $2.73 a day) -.

And once you start seeing results with what you are shown, you’re going to want to work with us in the future, which is what we want down the road.

You see, our goal is to help 1 Million people achieve success- we like helping other people- we are nice like that- and the more people we help, the more money we can make (you’ll find this out too!) .  

This is a lofty goal… which is why we need to get in front of as many people as possible and the price is insanely low compared to other real estate products.

We’re reaching for the masses.  Making it affordable for anyone to get into real estate.

You will be given everything you need to succeed.  It’s the same systems I’ve used to generate millions of dollars in revenue, in today’s market, so I know you have everything you need.

The rest all comes down to how much work YOU put into your own journey.

Imagine a professional race car driver giving you a formula 1 car, handing you the keys for less than $2.73 and saying “hop in and I’ll show you how to drive it”.

Do you think if you put in the work, practice, and listened to your race car coach you would learn how to drive that formula 1 car?

I think you would.

This is the exact same thing.

The reason I am pushing this so hard is because I will seriously lose sleep at night, and feel like if I am not convincing you enough to join this program, I am doing you a dis-service and in- fact screwing you over because I know for a fact this is the best product on the market, the best price, and we are the real deal.

I see too many con-men coaches out to grab a quick buck and I am sick of it.

We’re here to turn the Real Estate coaching industry on its head.

So How Does All This Work?

It’s actually quite simple.

CLICK HERE to get VIP ACCESS—  And you’ll be emailed instructions for login.

That’s it.

Then the rest is up to you.

You are learning LIFE CHANGING information that costs others up to $50,000 to learn in other programs, for less than $2.73 a day AND getting the most up-to-date Investing information on a constant basis

Sound good?

Here’s what I want you to do next…

If you want to take advantage of this amazing life-changing opportunity:

CLICK HERE

From there we will send you login details and you can get started RIGHT NOW– 5 seconds from now!

Keep in mind that you have a 6-Month Guarantee. Start and complete the 6-Month Refund Challenge and if you don’t get your first flip … you can email us for a full refund.

It’s that easy.

You literally have no risk.

Check it out by CLICKING HERE and see what it can do for you!

I guarantee it will be the best money you have ever spent on education!

And if you are tight on cash and can’t get Better Tomorrow Group VIP ACCESS at the moment, remember it’s not “I can’t afford it… “ It’s how can I afford it….”  Once you understand the difference your life will change forever.

A few ideas off the top of my head:

  • You can borrow money (I borrowed $50 for my first deal) – this is an investment that will pay you back 100x’s  in the future
  • You can cut back on some expenses (coffee, alcohol, cigarettes)
  • You can sell something to get the money (old clothes, phones, furniture, shoes)
  • You can work over-time at your job to come up with the money

While you execute your plan to come up with some extra funds be sure join our free email newsletter at http://BetterTomorrowGroup.com !

You’ll get free lessons, tips/tricks and strategies on flipping houses.

We look forward to making this the best year of your life!

Get started right now and good luck out there!

Have a question ?

Ask us and 3576 other members on the BTG facebook page!

Would you like to learn more on these concepts in depth?  Get BTG VIP ACCESS.

Not a BTG VIP ACCESS member? Learn more HERE

(NOTE: BTG VIP ACCESS members are provided funds for deals)

Cheers,

Andrew T Greer

 CEO Better Tomorrow Group

*If you would like all 7 bonuses that come with this blog CLICK HERE