40k Flips

Module 4: Mindmap Conversion to Word Document

HOUSEKEEPING

  • Learn the $40k flips system and a daily plan to execute
  • foundation for success
  • Josh
  • Mark
  • set the ground rules
  • LIVE coaching
  • all email into the Google group
  • so everyone has the benefit of the question and the answer
  • only constructive feedback allowed
  • no bitching just to bitch
  • SUPPORT QUESTIONS
  • access to the members site
  • user name
  • password
  • register for the coaching calls
  • link
  • problem Credit cards / billing
  • show them the members site
  • submit your deals
  • coaching application
  • coaching calls
  • register for all calls
  • cover the schedule of calls
  • every Tuesday and Thursday
  • %5 to pan can
  • thanks for donation and support
  • June 1st 5k walk run
  • $44,000

THE BIG QUESTION

  • why do real estate investors focus on sellers and buyers WITHOUT focusing on funding?
  • serving private lenders first is the foundation for a winning business model and mindset
  • give starts receiving process
  • marketing is sales in print
  • Joe Polish
  • typical real estate investor
  • goes and finds deals
  • tries to buy stuff
  • ends up wholesaling everything due to lack of funding
  • find the funding and have your competition will bring you the deals

ALTERNATIVE FORMS OF FUNDING

  • Hard Money Loan
  • ReCasa Loan Information Package 7.2.2012.pdf
  • Term
  • 6-9 months
  • rate
  • Prime plus 6.25%
  • Min 9.5%
  • Points
  • 5 pts. up front
  • Example
  • Borrowing 100k
  • $5,000 up front
  • Prior to closing
  • Builder's risk policy, title ins, survey
  • Draws
  • $5,000 increments
  • Example:
  • you do the work
  • you pay for the work
  • they come and inspect the work
  • then we reimburse you
  • Credit
  • 680 or better
  • they are going to pull credit from all three bureaus
  • Collateral
  • Mortgage on your primary
  • Repayment
  • Monthly interest only payments
  • example
  • 100,000 loan
  • 12% interest
  • 12,000 yr.
  • 1k month
  • Loan Amount
  • 100% of purchase and improvements up to 70% of completed project
  • Application
  • loan app
  • 2 months bank statements
  • 2 years tax returns
  • 2 recent pay stubs
  • Per Fin Statement
  • Schedule of assets
  • Sounds pretty Much like bank loan!!!
  • Line of Credit
  • Institutional Financing
  • Bank Line of Credit
  • at least 2 years
  • CPA's by trade
  • Case Study
  • Tempo Funding
  • Gap Funding
  • 1st mortgage HARD MONEY LENDER / PRIVATE MONEY LENDER FOR 500k
  • Need 100k REPAIRS
  • hard money lender will only go 552k
  • they will cover the remaining 50-100k
  • 2nd mortgage
  • ARV 850k
  • Equity partnership
  • Case Study Scenario
  • JV partnership
  • 1 guy puts up all the money
  • 1 guy does all the work
  • Own LLC 50/0
  • 500 units
  • 500 units
  • This allows for a partnership and allows for both parties to have equal control over the decision making process
  • Operating Agreement
  • Split Profits
  • DO NOT have to equal the ownership
  • Control
  • Is evidenced / shown thru stock / or unit ownership
  • 25% of the profit
  • we are going to do multiple deals over and over
  • the lender / investor DOESN'T Want to do a note and mortgage
  • THEY WANT OWNERSHIP / CONTROL over the deal
  • step 1
  • hire a lawyer and create the LLC
  • $400
  • LLC set up and filing
  • write operating agreement
  • Step 2
  • Fund the LLC
  • open a checking acct and both deposit $500 each
  • $1000
  • $500 matches your 500 units of ownership
  • $500 matches your units of ownership
  • BASIS
  • Step 3
  • Operating agreement is structured to determine who can do what/ loans/ decisions and profit splits
  • Step 4
  • the guy will all the cash deposits $100k Loan into the LLC
  • LLC has a note / loan $100k
  • NOTE
  • if the guy with all the money is going to loan $100k to the LLC HE MUST own 49% of the LLC or less
  • Step 5
  • make offers, EMD, POF and you are ready to go make money
  • Step 6
  • IF THE LLC needs MORE money
  • the LLC can borrow additional money from private lenders

PRIVATE MONEY ELEVATOR PITCH

  • My Elevator Pitch
  • Hey Josh what do you do?
  • Well, I raise capital for real estate!
  • My favorite
  • I raise money for real estate deals. I raise money from private investors, I buy foreclosures and pay my investors a fixed double digit rate of return
  • I own a bunch of real estate businesses and I raise capital to fund projects. I work with investors and pay them a double digit rate of return
  • BECAUSE ITS SUPER SEXY!!!!!!!!!!!!
  • response
  • ohthat’s great I’ve always wanted to buy a rental!!
  • oh kind of like Carlton sheets
  • sounds interesting tell me more
  • Tell everyone about what you do "in a cool way"
  • Its works great for everyone: my investors earn a fixed double digit rate of return and I can move faster and closer quicker b/c we can pay cash so I’m able to find and buy the best deals before anyone else.
  • tell me more: well THE SEC requires that we meet face to face and we wait at least 30 days before you invest with me

PRIVATE MONEY PARTNER PHONE CALL BEHIND

  • Hey this is josh. I was calling to see if you got my newsletter. Ok great. How do you like it? Well the reason that I sent it to you is not b/;cI thought you were going to buy or sell a house. I sent it to you b/c you are my friend and I want you to know what I do in case you come across someone who can use my services. Whens a good time for us to hook up so I can tell you what I’m looking for exactly.

PRIVATE MONEY PARTNER FOLDER

  • 3 ring binder
  • Wal Mart $.97 Cents
  • left side
  • Sample Note and Mortgage in the front left pocket with their name on it
  • so they know what it will look like
  • 4034 Manchester Road Akron Ohio 44319 1st Mortgage SAMPLE FOR PUBLIC 8.27.2012.docx
  • Equity Participation Note 4034 Manchester Road Akron Ohio 44319 1st mortgage SAMPLE FOR PUBLIC 8.27.2012.docx
  • Evaluation Handout in the left pocket
  • 3 ring hole punch
  • PPT preso
  • 1 slide per page
  • Use the first 20 slides only
  • Millennium Capital Inv FINAL 5.2.13.pptx
  • right side
  • Flyers and Handouts in right pocket
  • Improving Communities Document.docx
  • Neighborhood Flyer Document.docx
  • IRA Vacation Flyer Document.docx
  • Investment Highlights Document.docx
  • Private Money IRA docs
  • New Account Application Kit - Rev 03-12-13 1.pdf
  • iPlan Promissory Note Investment Kit - Rev 04-03-13.pdf

OVERALL GOAL!!!

  • definite timeline
  • get the funding handed over to you
  • What’s the desired outcome
  • modules 1,2,3,4
  • iPlan group
  • JoeDunson
  • David streeter
  • josh
  • pick the best deal on your doorstep
  • module 5
  • Tuesday May 21st
  • Identify your sweet spot
  • East Side
  • RENTAL COMMUNITY
  • Point of sale inspections
  • South side
  • retail buyers
  • West side
  • retail buyers
  • $80,000
  • $150,000 to $120,000
  • middle class neighborhoods
  • most options
  • Resources
  • Foundation for Success
  • Fixer Formula #1
  • ARV x's 65% = total investment
  • $140,000 X's 65% = $91,000
  • $159,900 - $82,000 (4k) - $86
  • Fixer Formula #2
  • ARV
  • Minus 10% = sales price
  • Minus 10% = net proceeds
  • Minus repairs
  • Minus $40,000
  • Equals highest possible offer
  • HPO
  • minus 20% = Initial offer price

REHABBING SUCCESS STEPS

  • outsource the improvements
  • modules 6,7,8
  • FINAL expense budget melody 5.5.13.xlsx
  • run the property launch formula - Mod 9
  • module 9
  • 8575 Melody Lane Property Launch Open House Slideshow.pptx
  • Expense Form Melody Ln..xls
  • Melody Lane 1.jpg
  • Melody Lane 2.jpg
  • Melody Lane 3.jpg
  • Melody Lane 4.jpg
  • Melody Lane 5.jpg
  • Melody Lane 6.jpg
  • Melody Lane 7.jpg
  • Melody Lane 8.jpg
  • Melody Lane drawing flyer.pdf
  • Melody Lane drawing flyer4.pdf
  • Melody Lane offer flyer.pdf
  • Melody Lane offer flyer4.pdf
  • Melody Ln Basement Part 2.png
  • Melody Ln Basement Part 3.png
  • Melody Ln Bathroom Part 1.png
  • Melody Ln Bathroom Part 3.png
  • Melody Ln EXT Pre-Launch 1.png
  • Melody Ln EXT Pre-Launch 2.png
  • Melody Ln Hallway Part 1.png
  • Melody Ln Hallway Part 3.png
  • Melody Ln New Wall Part 1.png
  • Melody Ln New Wall Part 2.png
  • Melody Ln New Wall Part 3.png
  • melodyMLS.pdf
  • Property Launch Sign Up Melody.docx
  • Raffle Melody.jpg
  • 3-24-13 Property Launches Task List Bailey and Melody.accdb
  • How to Plan a property launch Melody Lane and bailey Road Case Studies 3.12.2013.xmind
  • What's working now Property Launches.xmind
  • run the closing checklist
  • module 10
  • track your cash
  • Bonus class 11
  • the truth about buyer financing
  • bonus class 12
  • 38 Edgewood Drive Case Study
  • notes
  • Equity Participation Note 38 Edgewood drive GraftonOhio 44044 1st mortgage Pete Vagt 70k 5.20.2013 with notary FINAL.docx
  • mortgages
  • 38 Edgewood drive GraftonOhio 44044 1st mortgage Pete Vagt 70k 5.20.2013.docx

PURCHASE

  • FNMA FORECLOSURE
  • MLS LISTING
  • NOTHING SPECIAL
  • great neighborhood
  • ranch
  • listing price doesn't matter
  • outdated
  • started low
  • profit
  • Projection
  • Purchase $41,000
  • 38 Edgewood Dr FINAL PURCHASE HUD 1 5.6.13.pdf
  • 39796.72 net to close
  • Improvements
  • $25,000
  • Investment
  • $70,000
  • Profit up front
  • $4,000
  • List
  • $135,000
  • Sell
  • $115,00 - $120,000
  • Net $105 - $110,000
  • Profit $35,000 - $40,000
  • Turn Around Time
  • 6 weeks
  • Property launch Scheduled for June 23rd
  • back up date June 30th
  • 38 Edgewood profit projection example 5.15.13.xlsx

HOW DID I FIND THESE PRIVATE LENDERS

  • newsletter
  • Pete
  • chemical engineer
  • supplier to a big 3 car manufactures in Detroit
  • neighbor
  • put onto newsletter list
  • sent newsletters over 6 months
  • talked over regular interactions
  • asked me to talk more specifically about what I do
  • I put him off 3-4 times
  • attended graduation parties
  • finally sat down and talked formally over lunch
  • took him a nice restaurant
  • Funded another deal that closed 2 weeks ago
  • Rolling his money into a new deal
  • they each got the newsletter

PROJECT 100

  • write down 100 friends, family, network
  • DiscoverYourSphere.pdf
  • gather up their emails, phones and physical address
  • "Explain what you do?"
  • GARY KELLER
  • KELLER WILLIAMS
  • the millionaire real estate agent?
  • Northwestern mutual
  • FORTUNE 100 company
  • They come back after doing one deal and do more deals
  • 1297 Steve Drive
  • purchase
  • FNMA FORECLOSURE
  • MLS LISTING
  • NOTHING SPECIAL
  • great neighborhood
  • ranch
  • listing price doesn't matter
  • outdated
  • started low
  • profit
  • Projection
  • Purchase $41,000
  • HUD Settlement Statement - 64710 1297 Steve drive purchase HUD 1.pdf
  • 1297 Steve drive earnest money.png
  • Improvements
  • 33,000
  • Investment
  • 90,000
  • Profit up front
  • $4,000
  • List
  • 149,900
  • Sell
  • 135,000
  • 121,500 NET
  • Profit $35,000 - $40,000
  • Turn Around Time
  • 10 weeks

HOMEWORK

  • convert the Millennium Capital Investments PPT into your own
  • project 100
  • begin networking with your project 100 to get their physical addresses, emails and phone numbers
  • write down everyone you know
  • by first and last name
  • $40k flips coaching
  • GOAL
  • 1 private investor
  • fund 1 transaction
  • 1 reliable contractor
  • 1 40k flip property
  • $40,000
  • Self Directed IRA custodians
  • iPlan Group
  • Jill banner and Erica Kelly
  • 1-855-604-7526 # 1

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