Agenda. Day 2: Day 1: Accountability & Trouble Shooting Remote Wholesaling Off Market Deals Full Service Wholesaling (Steps A-Z)

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2 IMPORTANT Thank you for attending. The presentation you are about to participate in is brought to you by Response, a training and education company. We do not sell a business opportunity, get rich quick program, or guaranteed money-making system. We believe, with education, you can be better prepared to make investment decisions, but we cannot guarantee your success in investing. We do not make earnings claims, efforts claims, return on investment claims, or claims that our training will make you any money. Investing of any kind carries risk and it is possible to lose some or all of your money. The training provided is general in nature, and may not be appropriate for all individuals. It is highly recommended that you work with licensed professionals regarding securities and other investments. We are not a licensed broker, registered investment advisor, tax accountant, or law firm. It is highly recommended that you consult with appropriately licensed experts before engaging in any specific investment transaction. The Company s hired presenters, trainers, and staff may hold various registration and licensing, but they do not operate in such a capacity, as agents of the company. Please be aware that the training may include case studies and hypothetical examples that are used for illustrative and education purposes only. You should not view such illustrations as common or typical. Each investor and circumstances of an investment are unique. Customer results vary significantly and depend on many factors such as market conditions, and individual effort, time, and skill of the student. For more information, please visit

3 Agenda Day 1: Accountability & Trouble Shooting Remote Wholesaling Off Market Deals Full Service Wholesaling (Steps A-Z) Day 2: Power Team Rehab Rent Refi Running the Numbers Deal at a Glance Results Driven Success!

4 Assignments Accountability 1. How many cash investors on your buyers list? 2. How many RE agents are you working with? 3. How many A and B listings have you received from your agents? 4. How many FSBO or Off Market deals have you found? 5. How many offers have you made? 6. How many offers have you had accepted? 7. How many deals have you completed?

5 3 Elements of a Deal Money Properties Offers Cash Loan Buyers MLS Off Market Wholesalers Repairs ARV Profit

6 Review/Trouble Shooting Find and Qualify Cash Investors? Find Deals? Make Offers?

7 Assignments Wholesaling Review Simply match buyers and sellers. No hold time. Flipping takes 3-6 mo. No down payment. No credit risk. Unlimited deals!

8 Managing Buyers Name Phone Investment Area Property Characteristics Strategy All in Price ARV % or ROI Properties per month

9 Buyers Spreadsheet and Software

10 Assignment Enter your current list of cash investors to the Qualified Cash Investor Spreadsheet. Add your current list of cash investors into RE Pro/Elite. both spreadsheets to your trainer.

11 15 MINUTE BREAK

12 Elite Training

13 Logical Progression

14 Remote Wholesaling Find A players. Perform market research. Use large map to track properties and neighborhoods Submit offers. Visit the market when an offer is accepted. Work your guts out!

15 Market Research Attomdata.com/news Bestplaces.net Zillow.com/research/local-market-reports Realtor.com/research/data

16 Key Indicators Appreciation Gradual growth Housing Inventory Decreasing Unemployment rate Gradually decreasing Rental Yield Gross Annual Rents / Avg. List Price Lower End Neighborhoods Older neighborhoods, Blue Collar, average schools and crime

17 Neighborhood Grading Scale A: Executive neighborhoods B: Pride of ownership, nice areas and new cars C: Run down, older cars and blue collar D: Theft, drugs, old cars and fewer jobs F: Violent crime, war zones

18 3 Elements of a Deal Money Properties Offers Cash Loan Buyers MLS Off Market Wholesalers Repairs ARV Profit

19 Realtors Off Market Wholesalers Deal Acquisition

20 Deal Acquisition - Realtors Seasoned agents with investing experience: Know how to do a deal. Newer agents: Smaller clientele base. Eager to prove themselves. Electronic contracts One template contract for every offer.

21 Realtors Best Practices 1. 10% do 90% of the work! 2. Electronic contracts. 3. Get suggestions for other power team members. 4. Calculate average price of cash purchases.

22 Listings Focus on lower end neighborhoods (C, C+ and B-) A and B grade listings ONLY Vacant Needs work/updating Seller motivation (price reduced, DOM, back on market, cash only, etc ) Ask for listings per week, per Realtor every week!

23 Train your Realtor to Offer Submission Walk through the property prior to each offer. Calculate the ARV. Make offers immediately! Work with a sense of urgency. Don t over think it!

24 Shot Gun Strategy WARNING! This only works with agents willing to cancel contracts and consistently ask sellers for price reductions Identify A and B listings. Make offers at 80% of asking price. Goal is 25:1. If ratio is less than 25:1, reduce offer price to 75% of asking price. Continue to make adjustments until offer to acceptance ratio is 25:1.

25 When sellers counter: 1st counter 1% 2nd counter 1% 3rd counter 3% Continue until MAX $ If close on 2 nd or 3 rd counter, send in contractor to firm up bid. Counter Offers

26 Managing Offers Date of offer Source of lead Address Type of property List price All in Price Motivation Size (beds, baths, sqft) ARV Estimated repair budget Max Allowable Offer (MAO) Result

27 Offer Spreadsheet

28 Lunch Assignment Enter details of each of your offers into the Managing Offers Spreadsheet. Add your current list of cash investors into RE Pro/Elite. Enter your current list of cash investors to the Qualified Cash Investor Spreadsheet. both spreadsheets to your trainer.

29 LUNCH BREAK

30 Lunch Assignment Enter details of each of your offers into the Managing Offers Spreadsheet. Add your current list of cash investors into RE Pro/Elite. Enter your current list of cash investors to the Qualified Cash Investor Spreadsheet. both spreadsheets to your trainer.

31 Deal Acquisition Off Market Motivated/Distressed Home Owners Absentee Owners

32 Create a Marketing Budget/Plan Time vs. Money Budget your TIME weekly Budget your MONEY monthly If you plan it, it will happen. If you try to find time, it will NEVER happen.

33 Motivated/Distressed Home Owners Debt/Death/Divorce Data lists (NOD s, Divorce filings, Probate, Estate) RE Pro/Elite County recorder ( Bandit signs

34 Marketing Techniques Criteria: LTV is 70-75% or less Direct Mail Postcards Handwritten letters Cold calling Knocking doors

35 Cold Calling Knocking Doors My name is [name] and I m a local real estate investor. I m interested in purchasing homes in this area. Would you happen to be interested in selling your home or would you know anyone in the neighborhood that is?

36 Bandit Signs

37 Landlords/Heirs Out of state/in state Data lists RE Pro/Elite Realtors Title Companies Absentee Owners

38 Marketing Techniques Criteria Acquired the property more than 1 year ago. LTV is 50% or less. Direct Mail Postcards Letters Cold Calling

39 Cold Calling Absentee Owners Hi, this is [name], I m calling on behalf of [your company name]. I m extremely interested in your property located at [address]. Is the property currently for sale?

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41 Real Estate Lead Sheet Real Estate Lead Sheet How did you hear about us? Sellers Name: Phone Number: Address: Property Address: How long have you owned the property? Type of Property: Single Family Multi Family Mobile Other Beds Baths Garage (Y/N) Basement (Y/N) Square Feet Year Built HOA Fees/Month HOA Current? Pool (Y/N) Is this property a rental? Rent Amount? Property Condition? (Rate on a scale of 1-10, 10 being mint condition) What do you estimate is needed to put the property in 'Mint Condition'? What type of repairs are needed? Water heater? Age? Furnace? Age? Air Conditioner? Age? Condition of the roof? Age? Any plumbing or electrical concerns? Why are you selling? Are the payments and taxes current? What is your loan balance (payoff)? If I can pay cash and close quickly, would you take the payoff? IF THE OWNER SAYS 'NO' How much do you need? Is your price flexible? What is your asking price? What price could you get to? "I don't know if that price will work, but let me do some research and I'll get back to you " INTERNAL USE ONLY Tax Assessed Value Annual Tax When did the seller buy the house? What price did the seller buy it? What school district is the property in? Estimated ARV? Rent Value? Gross Rental Yield? #DIV/0! Making an Offer? Offer Price?

42 Offer Submission Never make an offer during the 1 st conversation. Only pursue leads with equity and seller motivation. Use software/zillow to calculate ARV. Walk through the property before you make an offer. Call the seller to make an offer.

43 If the seller counter offers, stay firm or counter slightly. If seller stays firm on counter, follow up in 14 days. If seller rejects offer, follow up in 30 days If seller accepts offer, get contract signed. Counter Offers

44 15 MINUTE BREAK

45 3 Elements of a Deal Money Properties Offers Cash Loan Buyers MLS Off Market Wholesalers Repairs ARV Profit

46 Deal Acquisition - Wholesalers Finding techniques Call ads for buyers Call ads for sellers Negotiating Earnest money

47 Finding Techniques Many We Buy Houses ads are wholesalers. Google.com & Craigslist.org We buy houses search. Identify local buyers with phone numbers What to say: I saw from your ad on [property address] that you re buying houses, I m calling to see if you have anything for sale. I can sometimes get great deals through other investors, do you have anything?

48 Call Ads for Buyers Ask about their business: How many deals are your buyers purchasing each month? What kind of deals are you getting for your buyers? Buyers criteria? Price, location, beds & baths, sq/ft, rehab est., how many deals in the next 90 days, etc.?

49 Call Ads for Sellers I may have an interest in your property. How did you find this deal? What work does it need? What s your rehab estimate? Do you have a signed contract with the seller?

50 Talk about volume. Negotiating If I m able to commit to 2-3 per month can you give me better pricing? I m buying 4 houses this month, some of them could be yours if your fee is reasonable.

51 Negotiating I just put one under contract in that area for $85k, 10k less than what you're asking. Are you sure you don t have any room? $85k seems pretty high.

52 Earnest Money Wholesalers may want earnest money up front. Only give earnest money to the following: Realtor Title Company Attorney Note: We pay all wholesale fees at closing just in case the deal falls through.

53 Full Service Wholesaling

54 Full Service Wholesaling They bring the money you manage the project. Who are these investors? Sphere of influence Cash Buyers from RE Pro/RE Elite

55 Full Service Wholesaling Acquisition Realtors Off Market Wholesalers Offer Acceptance/Closing Realtor/Property Manager Contractors Title Company/Attorney Rehab Contractors List Realtor/Property Manger Sell/Rent Refinance (Rental Only) Repeat

56 Steps from A-Z - FLIPS A- Accepted contract After Repair Value (ARV) Rehab bid Insurance premium B- Before pictures C- Earnest money D- Day before purchase Order insurance Have contractor inspect home for vandalism

57 Steps from A-Z - FLIPS E- F- G- H- I- J- K- L- Property is purchased GET PAID! Turn on utilities Check meter Begin rehab (4-8 weeks) Post Scope of Work Require posted schedule for entire project Pay for materials 1 st ½ labor payment Inspect work

58 Steps from A-Z - FLIPS M- Alert Realtor a week before rehab is finished N- Realtor final inspection Sign off on punch list O- 2 nd ½ labor payment P- Stage the property Q- Realtor takes pictures R- Realtor lists the property Hold to ARV quote Sell less than 30 days

59 Steps from A-Z - FLIPS S- Accept offer Buyer is qualified (buyers agent to verify) Minimal seller concessions (I.E. FHA buyers) T- Realtor collects earnest money U- Home inspection V- Determine additional concessions W- Seller orders appraisal X- Appraisal is equal to or greater than purchase price Y- Close Z- Repeat

60 Steps from A-Z - RENTALS A- Accepted contract After Repair Value (ARV) Rehab bid Insurance premium Rent estimate (Rental Only) B- Before pictures C- Earnest money D- Day before purchase Order insurance Have contractor inspect home for vandalism

61 Steps from A-Z - RENTALS E- F- G- H- I- J- K- L- Property is purchased Turn on utilities Check meter Begin rehab (3-4 weeks) Post Scope of Work Require posted schedule for entire project Pay for materials 1 st ½ labor payment Inspect work

62 Steps from A-Z - RENTALS M- Alert PM a week before rehab is finished N- Send financials to bank O- PM Final inspection Sign off on punch list P- 2 nd ½ labor payment Q- After repair pictures R- PM begins rental process Hold to rent quote 14 days max!

63 Steps from A-Z - RENTALS S- T- U- V- W- X- Y- Z- Verify bank has financials Begin refinance process Order appraisal Send comps to appraiser Title work Property leased Refinance complete Get paid!

64 Assignments Find wholesalers (buyers and sellers) Qualify and add to buyers list Find contracts for sale. Use Real Estate Lead Sheet for each property. Pull list of Pre-Forelcosures Less than 70-75% LTV Export to Excel Pull a list of Absentee Owners (In State and Out of State) Purchase before Jan 1, 2018 Less than 50% LTV Export to Excel Create a Marketing Plan Choose a technique (Direct mail, Cold Call, Knocking Doors) Create a monthly/weekly budget (TIME and $$$) Purchase/create bandit signs (min. 25)

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66 Accountability Cash buyers RE Pro/Elite? Offers spreadsheet? Wholesalers? Assignable contracts? Pre-foreclosure leads? Absentee owners? Marketing plan? Marketing budget?

67 Agenda Day 1: Accountability & Trouble Shooting Remote Wholesaling Off Market Deals Full Service Wholesaling (Steps A-Z) Day 2: Power Team Rehab Rent Refi Running the Numbers Deal at a Glance Results Driven Success!

68 Power Team

69 Power Team Realtors Closing Agents Insurance Agent Contractors Property Managers Small Community Banks

70 Initial Organization Track: Company Person Contact info Impressions Follow up Result

71 A Players A Players: Never have to be told twice. Take full responsibility and ownership. Analyze and fix problems. Remember: Money will not turn a B player into an A player. You can train but don t have time to fix people. Anything less than an A player on your team will hinder your business.

72 Attorney/Title Company Title search: Additional liens 2nd or 3rd mortgage. Mechanics lien. Back taxes. Back-to-Back close: Use companies experienced in double closes, simultaneous, or same day closes.

73 Attorney/Title Company Best Practices 1. Pull title 2-3 days. 2. Clouded title issues. 3. Back taxes. 4. Accurate paperwork.

74 Insurance Agents Referrals. Determine buyer s needs. May already have one. Rehab vs Landlord insurance. Get quote. Compare and save.

75 Insurance Agents Best Practices 1. Order day of closing. 2. Flood zone? 3. Amount of coverage? 4. Deductible?

76 Contractors Use referrals. Check Lowes/Home Depot. Licensed, bonded & insured Criminal background check View work on previous jobs. Lay out Scope of Work.

77 Contractors Best Practices 1. Visit job sites. 2. Get copy of license & insurance. 3. Google name and company. 4. Check start time. - Agree to meet them at an early hour

78 Property Managers Referrals For Rent Ads Classify neighborhoods A, B or C Determine rental rates Screen tenants Collect payments Charge 8% fee

79 Property Managers Best practices 1. How many units do they manage? 2. Who handles incoming calls? 3. Who leases properties? 4. Where are majority of their properties? 5. Vacancy? Turnover rate? Turnover cost? 6. Owners responsibilities - Mowing, utilities, pets, etc.

80 15 MINUTE BREAK

81 Small Community Banks Cash Out No Season Refinance

82 Traditional Rental Investing Example 1: Investor has $100,000 cash DAY 1 - Purchase property - $75,000 (ARV = $125,000) DAY 30 Repairs - $25,000 DAY 45 Tenant moves in - $1,000/mo

83 Example #1 How many deals can the investor buy? Equity position? Amount of cash in bank?

84 Cash Out No Season Refinance Example 2: Investor has $100,000 cash DAY 1 - Purchase property - $75,000 DAY 30 Complete repairs - $25,000 DAY 35 Appraisal (ARV) - $125,000 DAY 45 Tenant moves in - $1,000/mo DAY 60 Close loan (cash out refi) - $100,000

85 Example #2 How many deals can the investor do per year? Equity position? Amount of cash in bank?

86 Small Community Banks Cash Out No Season Refinance Loans. Terms: Interest rate ½ to 1% more than bankrate.com 5 yr ARM 20 yr amortization Loan to Value (LTV) 75% to 80% of ARV Aggregate Guidance line of credit.

87 Small Community Banks Best practices 1. Don t expect calls back. 2. Reaffirm everything they agree to. 3. Expect them to lose your paperwork.

88 Full Service Wholesaling Offer Acceptance

89 Full Service Wholesaling Acquisition Realtors Off Market Wholesalers Offer Acceptance/Closing Realtor/Property Manager Contractors Title Company/Attorney Rehab Contractors List Realtor/Property Manger Sell/Rent Refinance (Rental Only) Repeat

90 Offer Acceptance Get the following team members to the property: Realtor Open door & pictures Contractor Rehab bid & opinion Property manager Rent estimate & opinion Send property info buyer. - Wholesale Examples

91 Offer Acceptance Photos of all major items and repairs Main exterior Roof, siding & windows Kitchen, baths & bedrooms Furnace, hot water heater & A/C Electrical panel & foundation Few shots of neighborhood YouTube Video Sample Video

92 Presenting Deals to Cash Investors Best Practices: Sell it! Make it a unique and rare investment opportunity! Include dozens of pictures and/or video of problem areas. A minimum of 3 sales comparables. Attach bid(s) for major repairs. Include a disclosure (see examples)

93 Managing Pipeline Accountability dates Rehab starts Rehab ends Lease Refinance Measurables What % of ARV are you buying at? ROI?

94 Managing Pipeline

95 LUNCH BREAK

96 Full Service Wholesaling Managing the Rehab

97 Full Service Wholesaling Acquisition Realtors Off Market Wholesalers Offer Acceptance/Closing Realtor/Property Manager Contractors Title Company/Attorney Rehab Contractors List Realtor/Property Manger Sell/Rent Refinance (Rental Only) Repeat

98 Rehab Written Scope of Work Contractor Bids Deadlines Accountability Measures

99 Written Scope of Work Typical work you do in each house: Flooring, drywall patch repair, paint and receptacles. Landscaping, lights, doors, hardware, kitchen and bath. Plumbing, electrical, panel box and HVAC Exterior paint, windows, tree trimming and roof. Quality is 80% of retail. Clean, smells right, sharp lines and all trash hauled away.

100 Scope of Work Complete on Every Job Remove carpet Remove trash Replace all lights Replace all outlets/switches Caulk/repair walls for paint Prime/paint walls Replace all door knobs Install vinyl/title in Kitchen/baths Repair all windows/screen Install smoke/co2 detectors Repair screen doors Install blinds Carpet install-home Depot Appliances-Home Depot Clean up exterior of house Install handrails in areas with 3 or more steps

101 Scope of Work Complete when needed Replace lower cabinets Replace upper cabinets Replace countertops Replace sink/faucet (K) Replace bathroom vanity Replace sink/faucet (B) Replace shower surround Replace toilet Build closets in bedrooms Replace exterior doors Replace interior doors Replace exterior deck Replace garage doors Exterior painting Replace drywall Mold remediation

102 Flip vs. Rental Materials Flip Granite Stainless steel appliances Rubbed bronze finishes $200 faucet 8 lb. carpet pad Ceramic tile or LVP Tile surround (bath) New cabinets Rental Laminate Black or white Brushed nickel $100 faucet 6 lb. carpet pad LVT Fiberglass surround (bath) Painted cabinets

103 Contractor Bids Max amount of rehab Be careful of change orders Detailed bids from 2 contractors. Don t share bids. Make sure entire Scope of Work is covered. Quality must be 80% of retail.

104 Flip Rehab Deadlines 4-8 week rehab Week 1: Utilities & permits Week 2-4: Demo, prep work, drywall & paint Week 4-7: Carpentry, lights, vanities & hardware Week 7-8: Final inspections

105 Rental Rehab Deadlines 3-4 week rehab Week 1: Utilities & permits Week 2: Demo, prep work, drywall & paint Week 3: Carpentry, lights, vanities & hardware Week 4: Final inspections

106 Accountability Measures Use Scope of Work to guide the whole project. Pay half when half of the job is done and the other half when the job is finished. Hold contractors to bids. Avoid change orders. Punch list the final week of the project. Charge a $100 fee per day past deadline. Have Realtor do a final inspection on Flips. Have Property Manager do a final inspection on Rentals.

107 Full Service Wholesaling List vs Rent

108 Full Service Wholesaling - Flips Acquisition Realtors Off Market Wholesalers Rehab Contractors List Realtor Sell Repeat

109 List/Sales Price ARV Range Realtor onsite Peak ARV vs. Average ARV

110 ARV Range Use Realtor to calculate ARV Determine amount by neighborhoods and beds/baths: A: Executive neighborhoods B: Pride of ownership, nice areas and new cars C: Run down, older cars and blue collar D: Theft, drugs, old cars and fewer jobs F: Violent crime, war zones Compare using RE Pro/Elite or Zillow

111 Rules in Calculating ARV 3-5 Sold Comps Renovated (Retail) Sold within 6 months ½ mile radius Same beds Same baths Square feet +/- 20% Bottom = 80% x sqft Top = 120% x sqft Age 40 years or older, any property 40 years or newer, +/- 5 years

112 Example Property Address: 818 W Cedar St, Compton, CA 90220

113 Realtor Onsite Inspect the property and neighborhood BEFORE offer is accepted. Determine quality of repairs needed. Pull comparables again after acceptance. Seek their opinion. They should have had experience selling retail in that area.

114 Peak ARV vs. Average ARV Neighborhoods and quality of rehab dictate ARV. Better renovations produce peak ARV. We do better rehab jobs and sell at top value.

115 Rent Range Use property manager to offer rental amount. Determine amount by neighborhoods and beds/baths: A: Executive neighborhood B: Pride of ownership, nice areas and new cars C: Run down, older cars and blue collar D: Theft, drugs, old cars and fewer jobs F: Violent crime, war zones Compare using Zillow, Rent-O-Meter or PadMapper.

116 Property Manager Onsite Inspect the property and neighborhood right after a contract is accepted. Use to assess the neighborhood and classify: A, B, C or D. Seek their opinion since they may have this property in their portfolio for the next 5-10 years.

117 Peak Rent vs. Average Rents Rehab jobs dictate rents. Better renovations produce peak rents. We do better rehab jobs and charge higher rents.

118 Full Service Wholesaling Refinance (Rentals)

119 Refinance Exchange Buyer Financials Seek Approval Begin Refinance

120 Exchange Buyer s Financials Last 2 years of taxes. Personal financial statements. Last 2 months of income statements. Send as Dropbox link.

121 Seek Approval Follow up once the bank has all the info. Realize they don t have the same urgency we do. Schedule to contact them every few days.

122 Begin Refinance Give bank heads up after you purchase. Start process of refinance on the 2nd week of rehab. Order appraisal. Create your own Appraiser Packet Meet appraiser at the house Order title. Do not wait on them, you must drive this on each property. Train them how to treat you!

123 Running the Numbers Full Service Wholesaling

124 Traditional Offer Formula After Repair Value x % of Buyers Purchase (75-80%) - Repair Estimate - Wholesale Fee MAXIMUM ALLOWABLE OFFER

125 Example After Repair Value - $225,000 x % of Buyers Purchase (80%) - Repair Estimate - $34,500 - Wholesale Fee - $7,500 MAO?

126 Example After Repair Value - $145,000 x % of Buyers Purchase (75%) - Repair Estimate - $28,500 - Wholesale Fee - $7,500 1 st Offer?

127 Full Service Wholesaling Flip Offer Formula After Repair Value - Closing/Agent Costs (8% of ARV) - Holding Costs (2% of ARV) - Repair Estimate - Desired Net Profit (Typically 8-15% of ARV) MAXIMUM ALLOWABLE OFFER **Your wholesale fee will be 50% of the Net Profit

128 Example After Repair Value - $225,000 - Closing/Agent Costs/Holding Costs (10% of ARV) - Repair Estimate - $34,500 - Desired Net Profit - $30,000 MAO?

129 Wholesale vs Full Service Traditional ARV - $150,000 % Buyers Purchase - 75% Repair Estimate - $35,000 Wholesale Fee - $5,000 MAO =? Full Service Wholesaling ARV - $150,000 Agent/CC/HC - 10% Repair Estimate - $35,000 Desired NET Profit- $20,000 MAO =? Your Profit =?

130 15 MINUTE BREAK

131 Full Service Wholesaling Rental Offer Formula After Repair Value x Loan to Value % for Cash Out Refinance (70% to 80%) - Repair Estimate - Wholesale Fee (5% of ARV or $5K whichever is greater) = MAXIMUM OFFER PRICE

132 Example After Repair Value - $150,000 x LTV% for Cash Out Refi (80%) - Repair Estimate - $20,000 - Wholesale Fee -?? MAO?

133 Cap Rate (ROI) Capitalization Rate = Net Operating Income Total Investment Total Investment = Purchase Price + Repairs

134 Cap Rate CAP RATE Formula Annual Rents - Vacancy Rate (5%) Gross Annual Rents - Annual Taxes -Annual Insurance - Property Management (8%) - Annual Maintenance (5%) - Owner Paid Utilities NET OPERATING INCOME NET OPERATING INCOME TOTAL INVESTMENT = CAP RATE

135 Example Purchase Price = $125,000 Repairs = $20,000 Monthly Rent = $1,100 Vacancy Rate = 5% Annual Taxes = $1,500 Annual Insurance = $800 Management = 8% Maintenance = 5% Net Operating Income =?? Total Investment =?? Cap Rate =??

136 Cash on Cash Return Cash on Cash Return= Annual Cash Flow Total Cash Investment Total Cash Investment = Cash invested in the property

137 Cash on Cash CASH ON CASH Formula Annual Rents - Vacancy Rate (5%) Gross Annual Rents - Annual Taxes -Annual Insurance - Property Management (8%) - Annual Maintenance (5%) - Owner Paid Utilities NET OPERATING INCOME - Annual Debt Service ANNUAL CASH FLOW ANNUAL CASH FLOW TOTAL CASH INVESTMENT = CASH ON CASH RETURN

138 Example Purchase Price = $125,000 Repairs = $20,000 Monthly Rent = $1,100 Vacancy Rate = 5% Annual Taxes = $1,500 Annual Insurance = $800 Management = 8% Maintenance = 5% Net Operating Income =?? Loan Amount = $100,000 Down Payment = $25,000 Monthly Payment = $688 Annual Cash Flow =?? Total Cash Invested =?? Cash on Cash Return =??

139 Deal at a Glance MLS # Address SFR/Duplex DOM Motivation Sq/Ft Rehab Z-Rents Annual Taxes Annual Insurance List Price Zestimate Estimated Appraisal Max Offer Status Result

140 MLS Property

141 Offer Spreadsheet

142 Realtor Comps 1313 E Beverly St, Tulsa

143 Property Manager Rent Estimate

144 Contractor s Scope of Work

145 Contractor Bid

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150 Property Manager Final Inspection

151 Rental Agreement

152 Refinance

153 Results Driven Success! 1. Eliminate Dream Killers. 2. Fire B & C players quickly. 3. Hit the goal! 4. Immerse yourself with business minded people and literature. 5. Success is the result of consistency & hard work.

154 Assignments Build your Cash Investor list! Focus on investors that want rentals or want to partner (you re the project manager) Use 2-4 Realtors to source your deals Get listings each week! MAKE OFFERS!!!!! Find Wholesalers Qualify and add to buyers list Find contracts for sale. Use Real Estate Lead Sheet for each property. Target Pre-Forelcosures Less than 70-75% LTV Export to Excel Target Absentee Owners (In State and Out of State) Purchase before Jan 1, 2017 Export to Excel Create a Marketing Plan Choose your techniques (Direct mail, Cold Call, Knocking Doors) Create a monthly budget (TIME and $$$) Purchase/create bandit signs (min. 25)

155 Congratulations! Graduate