Transcription
Real EstateInvestingfor WomenHow toAnalyze Deals&Submit OffersModule 5
Elements of a CMAComparative Market Analysis (CMA) SOLD PropertiesComparable in type, size and ageDOM (Days on the Market)Features, Amenities and Conditiono Make adjustments if needed1. MLS2. RedFin3. Zillow
Analyzing a Deal for Wholesaling*New* Rule of 70% to 85%Sliding scale depending on area and demandARV x (70% to 85%) – Repairs – Investor’s Profit MaxAllowable Offer
Analyzing a Deal for WholesalingAsking Price 79,900Comparables in the area 95,000 (Quick Sale) to 119,000 (High Wholesale)Offer price( 95k 119k)/2 x 70% 74,900if 15,000 rehab needed( 95k 119k)/2x 70%- 15,000 59,900
Analyzing a Deal for WholesalingAsking Price 225,000Comparables in the area 190,000 (Quick Sale) to 240,000 (High Wholesale)Offer price( 190k 240k)/2 x 85% 182,750if 25,000 rehab needed( 95k 119k)/2x 85%- 25,000 157,750
Analyzing a Deal for WholesalingSellers know more than they think about the propertyQuestions to ask the seller: What will it sell for after it is repaired?How much will it cost to repair?Estimated monthly rent (if rental)?Do you have equity in the property?o If no equity, are they behind on payments? (short sale)How much do you want for the property?
Repairs EstimateSquare Footage Method 5/sq.ft. for light rehab 10 to 12/sq.ft for medium rehab 15 to 20/sq.ft. for a heavy rehabConstruction Cost Estimator App
Real EstateInvestingfor WomenSubmittingContracts &ImportantClausesModule 5
Recommendations for Sale Contracts Offer 2-3 price options – betterthan Yes/No answerYou might have to educate theseller to “why” the price, marketconditions, comparables, etc.
Paperwork1.2.3.4.Sale Contract (2 pages – keep it simple)Main Contingency“Contingent to Business Partner’s Approvalwithin 20 days of acceptance of sale contract.”Lead Based Paint AddendumSeller’s Disclosure – “As Is”
PaperworkImportant Clauses on Contract (as needed) “Buyer reserves the right to assign thecontract” or “Mr Buyer and/or Assigns”2. “Buyer reserves the right to market the propertyto prospect investors”3. “Any liens and judgments on title to besatisfactorily negotiated”1.
PaperworkImportant Clause on Contract (as needed) -“Seller reserves the right to keep the property onthe market and accepts this contract as a contingentoffer. In the event seller receives a better offer, hewill provide the buyer herein a 72-hour(negotiable)first-right-of-refusal notice to perform.”
PaperworkImportant Clause on Contract (for EarnestMoney)“Buyer will deposit an additional escrow moneydeposit of xxx 21 days after acceptance of salecontract.”
PaperworkImportant Clauses on Seller Addendum – Property tobe Sold “As Is” (to be used between you and endbuyer)“Seller has never resided in the property, thereforehe/she will not make any representations. Buyer hasto rely on his/her own inspections and the propertywill be sold in ‘as is’ condition.”
Real EstateInvestingfor WomenWholesalingStrategiesModule 5
The 4 core strategies “Simple” WholesalingVirtual WholesalingCo-WholesalingAssignments
“Simple” wholesaling4-6weeks
5 Steps to wholesalingStep 1: Build a “Qualified” Buyers’ ListStep 2: Locate PropertiesDistressed SellersGo to the source** Direct Approach **Step 3: Run Comps and DueDiligence
5 Steps to wholesalingStep 4: Purchase the PropertyTitle Company ConsiderationsStep 5: Present the Property to yourBuyers List Qualified List is ImportantUse MLS as last resortLoophole Contingencies on Sale Contract
Tips to wholesaling Secure Financing with TransactionalFunding or End Buyer or PrivateLender Important Recommendations forsetting up a wholesaling machine – Organize and Automate Delegate Take action
Virtual wholesalingWhy wholesaling long distance? Better Markets Less Competition DiversificationRecommendations Wholesale locally first Organization is key Ability to delegate
Virtual wholesalingStep 1: Research Markets Realtor.org – National Association of Realtors ngkf.com – Newmark Grubb Knight Frank Then research the local area as explained inStep 2: Contact local agents and contractors Browse craigslist Local REIA and Meetup groups
Virtual wholesalingStep 3: Take a trip! Interview 2-3 agents and contractors Have them show you around different areasStep 4: Build a Buyers’ List (Module 3)Same strategy as for local strategyOne buyers’ list per area
Virtual wholesalingStep 5: Locate properties Can be done virtually Your out of town agent and contractor areyour “eyes and legs”Step 6: Title company & Financing Nationally connected
Co-wholesaling Partnership Quicker Results Better Than BirdDogging (50/50Split) Segmentation by Markets
Co-wholesalingStep 1 – Find Possible Partners- Bandit Signs- Blind Ads- Craigslist – Look for “Trigger Words”- Google “wholesaler” your cityStep 2 – Selection Process- Investors with properties and/orbuyers- Cash Investors
Co-wholesalingStep 3 – Sign Co-WholesalingAgreementStep 4 – Locate Buyers and/orPropertiesStep 5 – Sign Sale ContractRinse & Repeat
Bonus Co-wholesaling strategy Locate Properties Across Markets(Virtual Wholesaling) Locate Local Wholesalers Assign the Deals to Them under a Co-Wholesaling Agreement
Assignments Assign Contract to End Buyer Good Practice Profit is less than 5k Deed Restrictions
Real EstateInvestingfor WomenDue DiligenceModule 5
Part 1 – Buying Process Select a real estate professional and a title companyto work withFinancing properties – mortgage, private money,hard money, seller financing (Buy & Hold)Part 2 – Escrow and Due Diligence Startsas Contract is Accepted Financing Contingencies and Setup (Buy & Hold)Home Inspection (Buy & Hold)Appraisal (Buy & Hold)
Part 2 - continue Seller Disclosures (“As Is” if Wholesaling)Lead Based PaintTitle Work and Due Diligence – Abstract and InsuranceHOA Documents ReviewProperty Insurance (Buy & Hold)Part 3 – Closing Closing Day – Wiring Funds & Transfer of TitleProperty Management Consideration (Buy & Hold)
How to Check Title History & LiensThe government puts deadlineson how long you have to pay thetaxes.Recorder of DeedsLiens: Mortgages, Federal & State Income Taxes Liens, Sewer,Water, Judgments, HOA (Homeowner’s Association,) other propertydocuments historyCollector of RevenueBack Property Taxes and Tax LiensTax Assessor’s OfficeLegal property ownership, legal description, parcel/plot#Building Inspections OfficeBuilding violations and inspections
How to Check Title History & LiensThe government puts deadlineson how long you have to pay thetaxes.Forestry DepartmentCutting Grass Fees and Board UpSewer Service DepartmentSewer service and bills/liensComptrollerCity liens - unpaid taxes and feesClerk’s OfficeMechanic Liens (filed by contractors for unpaid work)HOAIf the property is in a subdivision or a condo development, thereare probably Homeowner’s Association Dues
SkillsDevelopmentPractice in Analyzing DealsFamiliarize with your government realestate offices in your city and county –NETROnline.com directory
Questionsfrom LiveRecordingParticipants
Real Estate Investing for Women How to Analyze Deals & Submit Offers Module 5. Elements of a CMA Comparative Market Analysis (CMA) SOLD Properties Comparable in type, size and age DOM (Days on the Market) Features, Amenities an
