Session #3 Topics (Last Session)

Transcription

1 Apartment Wholesaling Mastery Virtual Boot Camp Session #4 REMINDER: Dial in to the conference call number on your webinar screen. Lance Edwards Tip: If on a land line, please turn OFF your cell phone or place it 10 feet away. Session #3 Topics (Last Session) Homework Review Instruction Section 4: Structuring Your Deal Section 5: Finding Buyers Q&A Homework Assignment Special Announcement(s) Homework Review 1. Listen/read Modules 3C-G & 5 in Multifamily Success Home Study System. 2. Practice analyzing 3 more deals on using the Deal Analysis Sheets. 3. Call & speak to at least 2 new brokers. 4. Bring your comments and questions next week. 5. Optional: Download RealCoach QuickStart Audio at Create your daily mindset routine.

2 Let s Take Some Questions Questions from last week? Aha Moments from last week? Comments? Press *6 or enter through your Control Panel Curriculum Session #1 How to Recognize a Deal Session #2 How to Find Deals Session #3 - How to Create Deals & Attract Buyers Session #4 Closing & Getting it Done Session #4 Agenda Homework Review Instruction Section 6: Contracting & Closing Section 7: Getting it Done Q&A Homework Assignment Special Announcement Each session is 9:00-11:00 PM Eastern but I may go over to take questions. I will provide homework at 11:00 PM

3 The Wholesaling Process 1. Find the Deal 2. Qualify It 3. Get it Under Contract 4. Find the Dollars (Buyer) 5. Qualify Them 6. Assign the Contract to Buyer 7. Buyer Closes 8. You Collect Assignment Fee This is Tonight s Focus Section 6 Contracting & Closing Your Deal How to Get Control of a Property and Get it Closed so You Get Paid Reference: Module 5 in Home Study System Contracting & Closing Let s Review the Entire Process Go to the Process Flow Chart provided on the Resource Vault You are the Conductor - Orchestrating the Deal to Closing

4 Step-By-Step Cook Book Contracting & Closing Tools: 1. Letter of Intent 2. Contract 3. Assignment Agmt 4. Assignment Instruction(s) 5. Buy-Out Agmt (optional) 1. Make an offer to Seller thru Letter of Intent 2. Get the property under Contract with Seller 3. Find your Buyer 4. Assign the Contract to Buyer using Assignment Agreement 5. Notify the Title Company using Assignment Instructions 6. Buyer conducts due diligence 7. Buyer closes. You get paid at closing (or outside of closing) Letter of Intent (LOI) Only make offers and accept signed counter-offers in writing. NO verbal negotiation. No negotiation. Go to the Letter of Intent Schedule of Closing Negotiate & execute LOI x days Negotiate & execute Contract 10 biz days from executed LOI Deposit Earnest Money 3 business days from executed contract Inspection Period 45 days from executed contract date Financing Period 60 days from executed contract date Closing 60 days from executed contract date, with automatic 30 day extension if requested.

5 Contracting Use Commercial Contract Form promulgated by that state s Association of Realtors In Texas TAR Commercial Contract Form Get the contract from brokers or attorneys or Internet Buyer is Lance Edwards, and/or Assigns Have a lawyer review it You fill in the blanks to match the LOI You are FREE to change any parts of the Contract Form. Assignment Process Once you find a New Buyer, you sign a separate Assignment Agreement with your New Buyer You notify the Title Company with the Assignment Instructions. If questioned on a Private Assignment, explain that: This is the entity that will take title. These are you partners. You source the deals for the group. This is standard & common with commercial transactions. See the 1) Assignment Agreement Template & 2) Assignment Instruction Template(s) What if the Seller won t allow your Assignment? 1. Explain that you intend to assign the contract to a new entity prior to closing. 2. If necessary, add language to the contract: Buyer may assign this contract to an entity in which Buyer has an interest. 3. Execute a separate agreement with New Buyer whereby: a) New Buyer grants you 10% ownership interest in the property upon their closing. b) Immediately upon closing (& outside of closing), the New Buyer agrees to buy-out your interest for $xx, Use the Private Assignment Instructions form for the Title Co. See the Buy-Out Agreement Template

6 Assignment Fees Public vs. Private Public Assignment Fee Assignment Fee is part of the Assignment Instructions Assignment Fee is posted on the Settlement Statement for everyone to see Assignment Fee is paid at the closing table. Private Assignment Fee Assignment Fee is NOT part of the Assignment Instructions Assignment Fee is not part of the Settlement Statement it is private to you and your Buyer Assignment Fee is paid by Buyer outside of closing. Earnest Money Deposit Offer 0.5%; Accept 1% (of purchase price) Ideally, your Buyer makes the deposit. Alternatively, they reimburse you upon their Assignment. Raising Earnest Money Predisposed Alternative to low paying CD s & Money Markets Friends, family & referrals Control Money never touched by you Transfer from 1 account to another They can withdraw the funds with 3 days notice to you Low Risk Money held in Escrow Account, never touched. They are made party to the transaction details High Return Offer 2x Prime Rate for 120 days use Paid when you close;

7 Earnest Money Loan Execute Promissory Note with your private lender Security is their claim to retrieve the funds Provide instructions to Title Company Your private lender is a party to the contract They receive all notices Free to withdraw the earnest money (& cancel the contract). Ask for 5 business days advance notice of intent to withdraw Let s Take Some Questions Questions? Aha Moments? Can you do this? Press *6 or enter through your Control Panel Section 7: Getting it Done Reference: Module 7 in Home Study System Getting it Done

8 Flowchart to Sustained Success Vision Vision Board Vision Board Place what you want Don t place what you don t want, i.e. No Debt Flowchart to Sustained Success Vision Vision Board Story Board Plan

9 Story Board & Plan Flowchart to Sustained Success Vision Vision Board Story Board Plan Performance Dashboard Performance Dashboard Daily and Weekly Scorecard for: Marketing for Deals Marketing for Dollars Mindset See the Example

10 Final Lesson Learned Getting the Buyer to the Altar Not IF but WHEN your Buyer bolts. Keep finding Buyers until the deal closes. Tell your back-ups, You have 1 st option. Lesson Learned: Oversubscribe Creating Your Buyer s List 1. First, close a deal. 2. Ask your Buyer if they want more Get them under contract to buy. 3. Ask for referrals from your Buyer 4. Start advertising for Buyers We have deals like this. Systematize: Select Broker(s) to source your deal flow. Call other brokers: My group is looking for deals that meet these criteria We have cash and can close quickly. Systematize: Identify Key Frustrating Processes Mailing letters Bookkeeping Etc. Tom Sawyer School of Business (Jay Abraham)

11 Let s Take Some Questions Questions? Aha Moments? Can you do this? Press *6 or enter through your Control Panel Homework Assignment 1. Listen/read Modules 7 & 6 (optional) in Multifamily Success Home Study System. 2. Bring your comments and questions to our bonus Q&A Session. 3. Create deal flow 4. Create deal flow 5. Create deal flow Congratulations Newest Graduate! Please answer the brief survey as you exit the webinar & provide feedback / testimonial. Thank you.