REI Success Mastery

Hey everyone!  Jason Nedrow here with REI Success Mastery, where we teach you how to become a highly paid, professional real estate investor.  Now today we’re going to talk about your investing formula for wholesaling properties to buy and hold investors.  If you remember correctly we talked about three primary buyers you wholesale properties to.  You have your buy and hold investors, your fix and flip investors which are also your rehab investors, and then your retail buyers such as homeowners.

Now today, we’re going to focus on buy and hold investors.  Now their buying formula is quite a bit different than fix and flips investors or retail buyers.  It’s a little bit trickier but it’s not too bad once you get the hang of it.  Now buy and hold investors, their strategy is obviously to hold a property long term.  You know and they’re going to rent it out and so forth, so their more focused on return on investment.  Now you probably know how you figure return on an investment is you basically take the total invested in a deal.  You divide that into the net profit, the net gain on a deal, you got your return on your investment, So a buy and hold investor, how they look at it is total capital invested, they divide that into their net cash flow because that’s their net profit, and that’s how they get their return on their investment.

Now because of that, they have what’s called a cap rate formula that they use for figuring their buying price on a property and their total invested.  Let me show you what I’m talking about here.  Maybe you’ve heard of cap rate, maybe you haven’t, but how they figure this is total capital invested into a deal, divide that into the net operating income.  That’s how they end up with their cap rate.

Now if you haven’t hear of net operating income, how you figure that is you take the rent of a property, you subtract all the expenses such as insurance, property management, property taxes, all the expenses, except for the debt service.  That stays in there.  You subtract that from the rent, you’ve got a net operating income.  You’ve got to multiply it by 12 to get your annual net operating income.  Then you take that number and you come up here.  You divide total capital invested into it and that’s how they get their cap rate.

Now when a buy and hold investor comes to you , they’re already going to know what their cap rate is or what their desired cap rate is.  You are going to figure out the net operating income on a property, so the only unknown in this equation is going to be the total capital investment, generally speaking.  So you are going to have to reverse engineer this formula just a little bit to figure out their investment and their buy price and how are you going to do that is you’ll take the net operating income that you figured out, take the cap rate that they’re desiring, divide the cap rate into the net operating income, and that’ll give you the total capital invested.  Now I’ve got an example here to help illustrate my point so let’s talk about that.

So again, let’s take our buy and hold investor, let’s say the desired cap rate is 12%.  You find a deal and let’s say the rent on this property is $1,100 and the expenses is $335, again, everything except for the debt service.  And we end up $765 net operating income.  We’re going to multiply that by 12 so we get an annual net operating income, which ends up $9180 in this example.  We bring that over here, and again we reverse engineered our cap rate formula, so we take that desired cap rate, divide that into $9180 and now we have their total capital invested in a deal.  Now let’s say in this example, the repairs are $18,000.  You’re going to take that $18,000, subtract it from, again, the total capital invested, and that shows you their buy price as a buy and hold investor.

Now we still have to figure your wholesale profit on a deal, so we’re going to take their buy price, subtract your profit, let’s just say it’s $10,000, and that’s going to show you your buy price as a wholesale investor.

Now you’ve got to keep in mind, when you’re looking at a property, you’re doing an analysis, and you’re running your numbers, it’s all about the numbers.  You never get emotional about a deal.  If the numbers make sense, you do it, if they don’t, you move on.

Now if you can adjust the numbers just a little bit to make it work, that’s okay, but again, don’t push your numbers too much because that’s how you end up in trouble.  There are only a few places on here that you can really make some adjustments.  For example, you can always adjust your profit if you’re desperate or hungry enough, I mean heck.  You could make 5 grand instead of 10 grand if that’s what it takes to make the deal work, that’s up to you.  Same thing with the buy and hold investor, if he’s willing to adjust his cap rate a little bit, if he’s a little bit flexible, that’s obviously going to make a difference in the formula.

But really, again, you don’t have a whole lot of room other than that.  Repairs, you might be able to make a little bit of an adjustment there, depending on the contractors you’re going through.  Again, rent and expenses, that’s fixed so you really can’t do anything there.  I just encourage you, don’t push your numbers too much, and try to keep yourself just a little bit of wiggle room, just in case.  But that’s how it’s going to look if you’re looking at cap rate.

Now cap rate is generally what buy and hold investors focus on if they’re more, higher end rentals like multi-family investors, they talk a lot about cap rate, duplexes, four-plexes, more your high end rental investor’s focus on cap rate.

Now there is a second formula that we’re going to talk about here.  And let me show that to you real quick so you know what we’re talking about.  Now some of your buy and hold investors, they will focus more on a specific buy price formula.  Now if that’s the case, it’s a whole lot easier for them.  Let me show you what I’m talking about.  So let’s just say, again, all they care about is the buy price, that’s all they’re focusing on, this is a formula that you’re going to use.  You basically take their total desired that they want to go into a deal, they’re going to know, these types of investors, they know what type of areas they want to invest it so and they’re going to have a pretty good idea what their cap rate is going to be so, their rents, their expenses so, they’re going to have a pretty good idea about all that stuff.  So really, you’re just going to ask them, what is the most they want to go into a deal.  Now let’s just say in this example, this investor, the most he wants to go into a deal is $75,000.  He knows the area, that’s the most he can get away with.  Let’s say he finds a deal, and there’s $15,000 in repairs.  You subtract the $15,000, and right there you have buy price as a buy and hold investor.  Pretty simple huh?  Again you take your profit on the deal, you subtract that and now you have your buy price as a wholesale investor, a whole lot easier formula.

And again, just like I said before, you can adjust this just a little bit if you need to.  Again, just don’t push it too much.  But again, much nicer formula and this, you know most of your buy and hold investors that deal with your low end rentals, low end neighborhoods and so forth.  They’re more focused on a specific buy price.  That’s when you see a lot more of this.

Now a couple things to keep in mind as you’re looking at this.  You know first of all you’ve got to be flexible as a wholesale real estate investor.  In other words, you’ve got to get familiar with cap rate, and a specific buy price so that way you can work with both types of investors.  Keep that in mind, and also when you meet a new, a potential buyer, and you’re thinking about adding them to your buyers list, obviously you are going to ask them a series of questions, you want to get familiar with them and the more you get to know them, the easier it’s going to be for you and for them as well, so ask them questions like for example, you know, what locations do they want to invest in?  Specific neighborhoods?  What type of properties?  Duplexes, four-plexes, single families, size of the property, you know, as many specifics as you can get.

I mean some buy and hold investors don’t even want to focus on repairs.  They just want to buy a property that they can put renters in and that’s it.  They don’t want to do repairs.  So you’ve got to ask them those types of questions.  And when it’s all said and done, you got to make sure that their criteria for buying the property matches your criteria for wholesaling because if it doesn’t match up, it’s not going to work out.

You know, for example, maybe, you don’t want to work with buy and hold investors that want a property that’s ready to go.  You got to be willing to have investors that are willing to do some repairs so, keep that in mind.  Another question to ask them is what is their formula for buying properties?  That’s a big one obviously, and I’ll give you a little tip here.  See what ever questions you ask them, you’re more likely to lead them down that path.  And you definitely want to lead them down a certain path so for example, if you really don’t want to focus on cap rate, don’t ask them what their cap rate is because otherwise you’re more likely to have them give you a cap rate formula and so forth and that’s going to make it a little bit more complicated for you.

So what I encourage you to do is ask them, what is the most that you want to go into a deal?  You know, so ask them again.  Location, are they willing to do repairs on the property, what types of homes and stuff, and then ask them, what’s the most that you want to go into a deal?  See if you ask them that type of question, you’re more likely to get an investor who’s more willing to focus on a specific buy price formula versus a cap rate formula.  It’s going to make a whole lot easier for you.  So just, again, keep that in mind.

So that’s your investing formula for wholesaling properties, to buy and hold investors and again, if you want to see the investing formula for fix and flip investors or retail buyers, just go to our website, you can watch those videos there, or you can go to YouTube and subscribe to our channel but definitely go to our website because we’ve got a ton of great information, some really powerful strategies to help make a lot of money in today’s market, and I’ll tell you, we’ve got a guy on our team that made over $50,000 his first month doing exactly what I’m showing you right here.  Part-time!  As a brand new investor and if you’d like to see how he did it, go to our website, we’ve got a free video; we can see exactly how he did it.  Again, lot of great stuff for you, if you’re serious about making money in real estate, we can definitely help you make a lot of money right now.  Now as always, dream big dreams, and go to work.  See you next time.

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“rental properties” landlords “investing formula” “formula for investing” “real estate investors” “buy and hold investors” ARV “wholesaling properties” “investment properties” “investing in real estate” “exit strategies”

Hey everybody!  Jason Nedrow here with REI Success Mastery where we teach you how to become a highly paid, professional real estate investor.  Now today I want to talk about your wholesaling formula for wholesaling properties to fix and flip investors.

Now if you remember correctly, we talked about the three primary buyers that you’re wholesaling properties to.  The first one is fix and flip investors or rehab investors, they’re kind of one in the same.  The second one is buy and hold investors and the third one is retail buyers or home owners.

Now fix and flip investors and buy and hold investors you definitely want to build strong relationships with these individuals and the reason is, they are repeat customers.  If you take good care of them and they’re making a lot of money doing business with you, they’re going to come back and do a lot more business with you.  which means you’re going to make a lot more money.  So take care of your people.  They’ll buy multiple deals from you on a yearly basis, or even a monthly basis.  Repeat customers are good.

Now homeowners, you definitely want to take care of them too, but the thing is, they’re not as likely to be repeat customers.  It does happen but not as likely.

So today, we’re going to focus on fix and flip investors.  Now they have a different buying formula for acquiring properties than buy and hold investors do.  Now most fix and flip investors, their buying formula goes like this.  It’s ARV which is after repair value, multiplied by 65% minus repairs.  That equals their purchase, that’s what they’re looking to purchase the property for.

Now as the ARV increases, the 65% can also increase.  You know you can bump that up to maybe 70%, but this right here is pretty much a standard rule that you want to go by.  Now the other 35% in the deal, that basically takes care of the profit for the fix and flip investor and also takes care of their expenses, such as realtor fees, closing costs, peroration of taxes.  They probably had to borrow the money from a hard money lender, or some private investor, so they have some costs associated there.  So they’re looking again, to have a profit spread of about 35% before any expenses.

Now this is their buying formula, this is not your buying formula.  Again, keep in mind, you still got to make a profit on the deal, and how you figure in your profit is simply take what you’re looking to make from the deal and subtract it from their purchase.

So let’s say you’re making you want to make ten grand on the deal.  You’re going to go ahead and subtract $10,000 from their purchase and that’s going to equal your purchase as a wholesaler.  Pretty simple.  Now let’s take a look at an actual example to help kind of bring this home and make sure you understand this.

Let’s say you find a property that has an ARV of $150,000.  We’re going to multiply that by 65% and let’s say there’s about $25,000 worth of repairs on the deal.  So go ahead and subtract $25,000 that’s going to equal again, their purchase as a fix and flip investor.  In this example it’s going to be $72,500.  Now again, let’s say you’re looking to make $10,000 on the deal.  So you’re going to go ahead and subtract your $10,000 profit for the deal and that’s going to equal your purchase as a wholesaler which is $62,500.  So you want to purchase it here so again, you can make about $10,000 so after all said and done, the fix and flip investor can purchase it here.  They do the repairs, they still got about 35% profit margin there.  That’s how it works.

Now, again, this is how most fix and flip investors figure their formula for acquiring properties.  However there are some fix and flip investors that don’t have this formula.  Or they don’t have a formula at all.

So what you want to do as you meet these investors, you start building relationships, the first thing you should do is obviously ask them a series of questions.  Ask them if they do have a formula for acquiring properties, ask them what it is, it may be a little bit more different than this, but again this is a pretty standard rule, but find out what it is.  Again their profit margin may be a little bit different.  Also find out what type of properties they’re looking to acquire, what areas their trying to acquire those properties.  Find out as much as you possibly can about them, because, the more you learn about your investors, your purchasers, the easier it’s going to be for you to go out there and do what you need to do and make money.

Once again, one of the really important keys to making a fortune in this business is take good care of your buyers.  I can’t impress that on you enough.  If they’re making a lot of money by doing business with you, and the easier it is to do business with you, the more they’re going to keep coming back, and again, the more of these repeat buyers you have, all around your area, all these investors, again the more money you’re going to make, and it’s going to be a whole lot easier for you.  So that’s your investing formula for whole-selling properties to fix and flip investors.

Now again, we’re going to talk about buy and hold investors in another video but hopefully you found this information helpful.  If you did, please go to our website at the bottom of this video, we’ve got a ton of information, a lot of great content and it’s free.  We got some really powerful tips and strategies to help you make a ton of money in real estate and if you’re serious about making money in real estate, especially making money right now, definitely go to our website because we got some training there that will absolutely blow your mind.  We’ve got a gentlemen on our team that made over $50,000 his first month wholesaling properties.  Just part-time!  If he can do it, you can do it too.

Also go to YouTube and check us out there, and make sure you subscribe to our channel so you can get more free videos as we continue to roll out more great information down the road.  Other than that, as always, dream big dreams and go to work.  See you next time.

TAGS:

investing formula, formula for investing, real estate investors, rehab investors, fix and flip investors, ARV, wholesaling properties, investment properties, investing in real estate, exit strategies

Hey everyone.  Jason Nedrow here with REI Success Mastery where we teach you how to become a highly paid, professional real estate investor.  Now today we’re going to cover a 13 point checklist that homeowners and real estate investors should use when evaluating and purchasing a property.  Now this checklist will work for you if you’re buying a property for your own personal residence or if you’re a real estate investor and it’s strictly for investment purposes, either way it will work.

Now if this is your first video, this is a two part video series and you’re going to want to pause this and go to youtube or our website and watch part one first and that way it’s going to make a whole lot more sense to you.  You can get our web address below this video or tail end of this video but please, watch the first video and then come back and watch this one, it’ll make more sense to you.  Also keep in mind that there is so much content and information that this video series, part one and two covers the exterior checklist of a property.  We have a whole other video series that covers the interior checklist, so keep that in mind.

Now for those of you who have already seen part one, hey, welcome back, and let’s get to it.  So like I said before, keep in mind, minor overlook can lead to a major expense.  That’s why each one of these points on this checklist is just as important as the other, so keep that in mind.

Now number 7 on our checklist is the garage or car port.  Listen, now days, this can be a deal breaker for a lot of people.  Most people want to have a garage.  People spend a ton of money on their cars, they want to protect that investment, they want to have a place to park their car, and there is no garage or if the garage is too small, then they can’t park their car that could be an issue.  So if you’re trying to flip the property, you may have a challenge there.  A rental property, it may not be as big a deal and that’s why you always want to take into consideration, your exit strategy.  I mean, if you’re going to rent the property versus live in it, or try to flip it, some of these factors may not be as big a deal, and you might not spend as much money as you would otherwise, but I will tell you if you’re renting the property, if it’s got a car port or garage you’ll probably rent a lot quicker and easier that way.  That’s something I want you to take into consideration.

Number eight, sprinkler system.  Now I will tell you this isn’t as much really as a deal breaker as other factors, it really most of the time isn’t a deal breaker.  But most homes do have a sprinkler system, that why you want to add it to our checklist, and most people want a sprinkling system, and your property will sell quicker if it does have one.  Now again, rental properties, you may not think its big deal but I prefer to have a sprinkling system in my rental properties because I know my tenants are more likely to take care of the land and landscaping and that’ll save you a lot of money down the road, and a lot of hassle.  Once again, take a look, does it have a sprinkling system, does it need one, is that something you want to invest in and put one it, I mean that’s up to you and it depends on your strategy.  If you’ve got one, does it work properly, again, take a look at that because that may or may not be a big deal to you.

Number nine, window wells.  This is something that I see people overlook all the time.  I remember the first property I bought years ago, I didn’t pay attention to the window wells and they weren’t dug deep enough and what happened, the first major rain storm, all my window wells filled up, my basement flooded, and it cost me a ton of money in carpeting and it was just a huge headache.  Don’t let that happen to you.  Unfortunately, some builders out there don’t care about their reputation, I mean some states, don’t even require builders to have a license unfortunately, and so you get these builders that just build homes as fast as they can, they don’t care about the quality, and when it comes to window wells, sometimes they don’t dig the window wells as deeply as they should.  And what they do is they just fill them up with dirt and is not what you want.  If the window well has got dirt, that is a problem.  You want to make sure it’s got the proper fill, rocks in the bottom so it actually drains, that’s what window wells are designed to do.  So again, if it has dirt, a rain storm or in the spring time after all the snow melts, your window wells are going to fill up, it’s going to flood your basement, and again, a minor thing that’s going to cause a major expense for that, so pay attention to that and that will help you down the road.

Number 10, rain gutters.  Again this is another thing that people overlook so take a look at the rain gutters, does it have rain gutters, if it does, what kind of condition are they in?  Are they sagging?  Do they need to be repaired or are they bad enough they just need to be replaced?  You know, because again, all these factors we’re talking about here is going to make a big difference in your rehab costs and your purchase price.  Something else about your rain gutters too, is where do they drain?  Now that may sound kind or ridiculous but you know, if your rain gutter drains right next to your window well, again, a major rain storm, it’s going to fill up your basement.  That sounds ridiculous but there are builders out there that don’t pay attention to that, they just build homes and that does happen, I’ve seen that.  Also, again, my first property, again, I was novice, I didn’t know what I was doing.  The rain gutter actually drained out right there on the front sidewalk, right there by the front step going right into the front door.  Well again, that may not seem like a big deal in the summer time it wasn’t, in the winter time though, if we had a warm day, some of the snow would melt and run down the sidewalk and in the evening it would get cold and freeze and it would create a perfect sheet of ice.  I can’t tell you how many people would slip and fall going up the front step, now again, you don’t want that.  If you’re fix and flipping a property and you’re trying to show it in the winter time, that could really cost you a sale if someone slips on that ice.  Now on a rental property, you may not think that’s a big deal, I will tell you this, and I’m not trying to scare you, but we live in a very litigious society.  If one of your tenants walks into your property during the winter time and you got a rain gutter right there that’s over the sidewalk and doing the same thing.  If they slip and fall, they may find you liable, and try to blame you and try to sue you.  I’m not trying to scare you, these minor things, pay attention to, it can save you so much time and headache down the road.

Alright, the driveway and the sidewalks.  That is something else.  People are so focused on the home they don’t pay much attention to the driveway and the sidewalks.  Obviously over age, they crack and so forth but if so old you got a lot of cracking or part of the driveway is starting to sink, or tip a little bit, you know, you could have some problems.  You may want to consider patching it.  You know there are companies or remedies that can actually patch it up and it’s just fine but if it’s bad enough, you may want to replace the whole thing and that could be a major expense.  Now, one of my buddies bought a property and the driveway was sagging a little bit, and it didn’t seem like a big deal but we dug down and come to find out, part of the driveway was completely eroded underneath, there was no foundation underneath it and it was about ready to cave in so again, pay attention to those thing because it could make a big difference.  You know if you figured so much into your purchase price and after words you got a $5,000 expense you didn’t consider, that eats up a ton of your profit and makes a big deal.

Okay, number 12, porches and patios.  Does it have porches and patios?  If it does, what kind of condition are they in?  Do they need to be painted?  Something of that nature, does any repairs need to be done there?

Now our 13 point on our checklist is any additional structures on the property.  Now we’re talking about fences, sheds, barns, shops, swimming pools, now most real estate investors are not acquiring properties that have swimming pools, or sheds or barns or shops, you know, something like that.  It does happen and some investors do focus on stuff like that.  It’s not the general rule of thumb.  But once again, if it’s your own personal residence or if it’s a rental property, you may have some of that, but I want to point it out anyway, because if you have a nice home but the fence looks bad, it’s like having a nice car with ugly wheels.  You’ve got to make sure the fence looks as good as the home so, some people don’t notice that.  Same thing with the shed or the barn or the shop.  You may need to take the shed out if it looks bad, you may need to paint it or do something with it, the swimming pool, once again, what kind of condition is it in?  Pay attention to those things, every single thing I’m talking about here it doesn’t require a degree, you know that’s why I’m saying this, is don’t get overwhelmed.  You’re brand new to real estate and brand new real estate investing, don’t worry about any of this stuff, you can always call an expert, there is plenty of experts out there that if you’re not sure if you can get away with just repairing something or you have to replace the whole thing.  You know there are a lot business owners and contractors out there if they know they’re going to earn your business, they’ll come to your property a couple of times or at least the first time and do a walk through with you to help you understand when you can repair something or when you have to replace the whole thing, and that way, going into it the next time, you know what to look for and now you’re a little bit more of an expert.  Also home inspectors, you know, get a hold of them, they’ll come out and evaluate properties with you a tell you again, what you need to do in certain situations.  So that’s all part of the process, and again, the main thing is, don’t get overwhelmed you’ll get the hang of this.  Also keep in mind, each one of these checkpoints is really going to be determined by your exit strategy.  Listen, if you’re living in a property, you’re obviously going to spend more money than if you’re going to do a fix and flip.  You’ve got to keep that in mind.  If you’re going to do a fix and flip it doesn’t need to be up to your standard of living, it doesn’t mean you do a poor job on the property, but it just simply means, don’t make the mistake of getting so involved like you’re going to live in it cause you’re not.  The same thing with the rental property, you’re not going to do as much to it as if you’re living in the property or maybe doing a fix and flip, because you know, you’re going to have tenants in there and your tenants generally don’t take care of properties like you do so you’ve got to take that into consideration.  It all depends on your exit strategy.  When you’re going to buy properties in a neighborhood, make sure it fits in with the rest of the neighborhood.  You don’t want to have a home that sticks out and that looks really ugly compared to the rest of the homes and you also don’t wanna have a really nice home compared to everything else, you want to have a home that fits in with everything else but if you’re going to sell it, you want it to look just a little bit nicer than the rest of the homes, that way it will sell a little bit quicker and a little bit easier.

So, anyway, that’s a 13 point checklist for homeowners and real estate investors when you’re evaluating and purchasing property and that’s exterior, so make sure you watch the video series on the interior checklist and as always, please, go to our website, check out our videos and our blog and all the other information, we have a ton of information, it’s all free, so we got some really powerful tips and strategies to help you make a lot of money so if you’re serious about making money in real estate, we’ve got a guy on our team that made over $50,000 his first month wholesaling properties.  We’ve got a training system that will help you make a ton of money in today’s market.  Also go to youtube and check us out and subscribe to us there, anyway, dream big dreams, and go to work.  See you next time.

TAGS:

“property checklist” “buying checklist” “real estate investors” homeowners “property evaluation” “property analysis” “buying property” “real estate investing”

Hey everyone.  Jason Nedrow here with REI Success Mastery where we teach you how to become a highly paid, professional real estate investor.  Now today, I’m going to cover a 13 point checklist that homeowners and real estate investors should use when evaluating and purchasing a property.  Again, this checklist can be used if you’re purchasing your own personal residence or if you’re a real estate investor and it’s strictly for investment purposes, whether it’s buy and hold, wholesaling, fix and flip, rehab, this checklist will work for any of those situations.

There is a lot of content, a lot of information here so we’ve actually taken this video and we’ve actually separated it into 2 parts.  This is part one of our series.  As a matter of fact, this covers the exterior checklist.  Part 1 and Part 2 both cover the exterior.  We have a whole other training video series on the interior checklist.  So just to repeat myself, part 1 and part 2 of this series is the exterior checklist.  Again, there is a lot of content I want to give you here.  Now also keep in mind, even though I may look young, sometimes I have to have some notes in front of me, so if you catch me looking at my notes, please bear with me because again, I don’t want to leave anything out.  I want to do a good job for everyone, I want to do the best job I can, and I want to cover all of our basics.

Anyway, let’s go ahead and get started here.  Now some of these things I point out may seem kind of obvious, that’s okay.  I’m a firm believer being too informed is better than not having enough information.  You know, I’ve seen too many people get excited about real estate, buying a property, they go into it unprepared, they don’t go through their checklist they don’t do their diligence.  Unfortunately, too many times it comes back to bite them.  If you have any expenses later on, that can really, really hurt you.  I don’t want that to happen to you.  Again, being too prepared is better than not being prepared enough.

So number one on our checklist is the roof.  Now again, obviously, this can be a huge expense for you and it can make a big difference in your rehab cost and the purchase price of the property, so take a good look at the roof.  Is it possible that it needs to be repaired or replaced and again, you don’t have to be a rocket scientist, in other words, you don’t have to be an expert to see if there is any possible issues, and if you’re brand new to real estate, maybe there are some of these things you are not sure about, don’t worry about, because you can always call an expert.  You know there are a lot of business owners and contractors that will come take a look at the property with you the first few times till you really get the hang of it.  You can get a hold of a home inspector that will come over and take a look at the property.  So the first few times when you’re analyzing the property, if you feel like you need to have an expert there till you get the hang of it, that’s okay, go ahead and do it, but take a good look at the roof, because again, that can make a big difference.

Number two, the windows.  This is a huge selling factor for a lot of people, because the fact is, people more, now than ever are conscious about having an energy efficient home.  So does the property have the older, single pane wooden windows or is it the double pane vinyl windows, you know, because if they’re the older windows, you may have to replace those.  Now again, some of these factors are going to depend on you know, what you’re doing with the property, if you’re going to live in it, rent it out, that kind of thing.  Generally speaking, people want newer windows and if it’s got newer windows, what condition are they in?  A lot of the time, if the windows are stained people think they have to replace them, that’s not true.  There are companies out there that will come in and actually clean the windows, they’ve got a special formula for cleaning the windows and they can actually get them looking like new, and save you a whole bunch of money.  So take a good look at the windows.

Number three, take a good look at the exterior, just the general exterior of the property.  What kind of siding does it have, does it have metal siding, vinyl siding, wood siding, has it got brick.  You know a lot of your southern states with heavier winds, tornadoes, hurricanes, you know, you see a lot of brick homes.  So take a good look.  Does the exterior need to be cleaned or does anything need to be repaired or replaced.  You know, when it comes to metal siding for example, if you get a hail storm that comes through, a lot of times it’ll really dent the metal siding so you may end up having to replace some of the metal siding, and if it’s really poor quality, if it’s old if it’s faded, you may have a hard time, getting the color to match so, if you’re going to flip the property, you may have to end up replacing all of the siding so it looks good.  If you’re going to rent it out, you may get away with replacing just part of it.  It just depends on what you’re going to do with the property.  Same thing with vinyl siding, if a hail storm comes through, it damages it, and beats it all up, you may just be able to replace part of it, or have to replace the whole thing just depending on what you are going to do with the property.  Alright, wood siding, is there termite damage, again, you don’t have to be an expert, most people can take a look and see if there is any possible red flags or any possible issues.  So just take a good look at the exterior, and see if it needs to be cleaned, repaired, replaced, any damages, anything of that nature.

Number four, the foundation.  This is a big one, this is the one that people get really leery about.  Just taking a good look around the property, you can get a pretty good idea, are there any cracks in the foundation, and most foundations eventually will get a crack here and there, but a lot of cracks, are they big cracks, you know, that’s one indicator.  Also, what’s the landscaping around the property?  Does the landscaping actually go towards the house or away from the house, what I mean by that is for example, if you get a heavy rain, if the water is going to actually role towards the house, that means it’s going to go down by the foundation, you’re going to have some erosion and you’re going to have some issues at some point or another that’s not good.    So you want obviously, a property where the foundation is built up around or where the landscaping is built up around the foundation so the water goes away from it.  So that’s a good indicator, and again if it goes down to it, odds are there may be some foundation issues already.  Something else, I’m going to give you a little tip here.  It’s what’s called the marble test.  Take a marble go inside the property, go to one side of the house and see what happens.  Now if it sits in one place that’s a pretty good indicator that the foundation is okay, however, if it starts to roll pretty rapidly, that tells you, you may have some issues.  So that’s a really good test for you.  And if it’s a bigger house, make sure you go to a few different sections of the house because you know, if it’s a big enough house, big enough foundation, you may have part of it that test okay, but the other part you do that marble test it may not be okay.  So keep that in mind as well, but the foundation, again that’s important, it can be a big expense in your rehab cost.

Landscaping, and by the way with the foundation also, if there are issues, there are things you can do with that, that’s when you get a hold of an expert and they can help you out there, anyway. Number five, Landscaping.  This is huge, a lot of people don’t really think this is a big deal but it is, because curb appeal is your biggest factor.  They’ve done studies and they’ve found that within the first 60 seconds when somebody drives up in front of a home, they have all ready made a decision mentally whether or not they are going to buy the home, 60 seconds.  So you know, take a good look, what does the yard look like, in the winter, two feet of snow, you may not be able to get a really good idea so you’re going to have to do the best you can.  Again, what does the yard look like.  Is there a lot of weeds, can a little TLC bring it back into a good condition and again are you going to rent the property, are you going to sell it, are you going to live in it?  That also depends on what you are going to want to do with the landscaping.  Sometimes, you may just want to replace the landscaping, the flowerbeds, the trees, if it’s a nice house, but all the trees are dead, well obviously that doesn’t look good so you got to take that into consideration as well.  Here is something else about the landscaping.  Now I already mentioned around the foundation of the house that landscaping is built up or whatever, but here is something else, is the actual home built up?  Here is what I mean.  A lot of the older homes, years ago, they would build, the homes, pretty much level with the streets.  So if you’re in an area where there is a lot of flooding or during the wintertime when you get a lot of snow and in the spring it starts to melt, and what happens, a lot of those homes would get a lot of flooding.  Especially if they have basements, it was a regular issue.  You don’t want a property that is always flooding, if you’re renting it out, that’s going to be a pain in the neck and if you’re living in it, that’s going to be even worse, so you want a home that’s actually going to want to be built up, even with some of your newer homes you’ve got to pay attention and I’m telling you, a lot of people don’t notice things like this, but you see when you’re driving in a neighborhood, you’ll notice some neighborhoods, the homes are level at the street and some neighborhoods the homes are built up.  Your newer homes, generally, they’ve been built up, not always.  Sometimes you get these really shady contractors that kind of fly by night; they don’t have a good reputation.  They go from state to state, they’re building homes, they build a whole bunch of homes, they move on.  Unfortunately some states don’t require builders to have a license.  And some states, they’re not as strict about their codes as other states are.  So the fact is, you’ve got to pay attention no matter how old or how new the property is.  Good quality builders take their time to build up the home so that it sits up a little bit from the street, that way, even, especially if it’s got a street that’s especially important.  That way if you get a heavy rain or a heavy runoff with the winter, you don’t have to worry about your property flooding, so that’s a really good tip for you.

Number six.  Central air conditioning.  Now look around the property and see if there’s a central air conditioner or if there’s hook ups for them.  Now, I kind of chuckle at this because if the properties been vacant for a while, you’d be amazed at how many times, air conditioners get stolen, so pay close attention to see if there’s actually an air conditioner that’s supposed to be there.
Alright so anyway, so this is six out of our thirteen checklist points for homeowners and real estate investors for evaluating personal property, and again this is part one, so make sure you go to youtube and check out part 2 of our checklist or even go to the website at the bottom of this video and check it out there.  Plus we’ve got a lot of free content, a lot of free information on our website.  So go to our website no matter what, but make sure you go to part two and finish this off because I got some really good information that you’re going to want to hear about in that particular video as well.  So as always, dream big dreams and go to work.  See you soon.

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“property checklist” “buying checklist” “real estate investors” homeowners “property evaluation” “property analysis” “buying property” “real estate investing”

Hey everyone!  Jason Nedrow here with REI Success Mastery where we teach you how to become a highly paid, professional real estate investor.  Now today I’m going to share with you how professional real estate investors present a strong offer on a property.  As a matter of fact, I’m going to give you 5 keys to making a strong offer, so pay close attention.  Also keep in mind, these points I’m going to share with you really are going to vary from deal to deal because each deal is different.  You’re not always going to want to go in there with a strong offer.  So again, only use these if you want to go in hard and heavy and make a strong offer on a deal.

Alright so key number one, make a cash offer.  If you have a financing contingency that’s a much, much weaker offer.  Think about from the sellers standpoint, cash always is better.  cash is king.  So when you make a cash offer that’s much stronger.  And also keep in mind if you are using hard money or private money, that’s still considered a cash offer.  Now if you do make a cash offer you’re going to have to have proof of funds, and even if you’re using hard money or private money, you can still get proof of funds for that offer, but again, make a cash offer it’s going to be much stronger and it’s going to get you the results.

Number two, go in with a high EMD which is an earnest money deposit.  Now again, this is only if you want to make a strong offer.  You’re not always going to go in with a lot of earnest money, but again keep in mind, if the seller’s got two offers on the table, one from you and one from somebody else and each one of you are offering $200,000, however if you’ve got $10,000 earnest money and the other investor’s only got a $1000 earnest money, which one is the seller going to take.  Obviously your offer.  So the higher the earnest money, the stronger the offer is.  Now again, if you don’t care about the deal and so forth, then go with low earnest money.  That’s all part of the strategy.  These are only points again on those deals you really want to get a hold of.

Number three, wave your inspection.  Now this one I really, really got to caution you on.  This is not something you’re going to make a practice of, you shouldn’t make a practice of, and something I recommend except in those rare situation you really want to go in hard and heavy on a deal.  And only, I repeat only do it if you’re absolutely confident about the deal and the numbers and you know it’s not going to hurt you.  Alright so if you do want to make a strong offer, this is something, this is an option is really what it boils down to, and when you go into a deal, you don’t have to use all these points, you can only use a couple of them, you can put in a lot of earnest money, you can go in with cash offer and still have an inspection contingency in there.  So keep that in mind, but this is another point you can add to your arsenal if you do want to make your offer really, really strong.

Number four, close quickly.  Again, from the sellers standpoint, which one looks better to them.  If you close in 15 days or 30, or 45 days, obviously the sooner you can close the better it is for the seller.  That’s a lot stronger offer.  And if you’re a real estate investor, especially a wholesale real estate investor, it’s nothing for you to close in 10, 15 days.  Now ideally as a wholesale real estate investor, you want to close in 30 days.  That’s what you want to have your target date for, that way you’ve got plenty of time to get your buyer in place.  But see, this is another reason why we teach and train you to build your buyers list continually.  You’re always building your buyers list and you should actually build a buyers list before you acquire any properties, and that way once you’ve found a really good deal, you’ve already got a list of buyers and it’s nothing for you to close in 10, 15 days.  So that’s just another tool or a tip of the trade to really get the results you’re looking for.  But keep in mind, if you find a really good deal and you hurry and get on the phone and you get a hold of 10, 20, 30 fix and flip investors, or rehabors, or buy and hold investors, within an hour or two, odds are if it’s a good deal, you can find a buyer, and you can close within 10, 15 days, even if you don’t have a buyers list.  So keep that in mind, but close quick, that’s also a great way to present a strong offer.

Number five, reputation, reputation, reputation.  Now you can probably tell since I repeated that three times, why that’ so important.  It’s is important.  It’s probably the most important thing on here.  There’s an  old saying and that is your reputation will eventually you or it will help you, and that is absolutely true.  Listen, as a real estate investor, everything you do, everybody you deal with, you always make sure it’s a win/win situation.  Don’t get greedy.  Okay you definitely got to make money on these deals but make sure that your buyers are making money, make sure that everybody is making money, make sure the sellers making money, and so forth.  The fact is you take care of your people, you’re going to have an amazing reputation, people are going to want to do business with you.  Don’t get greedy, take care of your people, make sure it’s a win/win.  I’ll give you a great example of this.

You know, there’s an investor out there that he goes out there, he puts an offer down on a deal, and he has an inspection contingency.  What he does is he has a 10 day inspection contingency, he’ll bring in some home inspectors, some contractors, and give a full detailed report on the repairs on the property, then he’ll go back to the seller and he’ll say hey listen, I need you to come down on your price.  I’ve got a detailed list of repairs here and I need you guys to lower your price.  Now legally, is that okay?  Well sure, there’s nothing wrong with that but the fact is, because again he’s got a contingency in there, but ethically, it’s not right.  The fact is you tick a lot of people off that way, you’re going to upset a lot of people and nobody likes him, no one wants to do business with him because he’s always trying to find a way to take advantage of them.  So don’t do that.

As a matter of fact, when it comes to like, closing on a property, don’t make an offer, and set a closing date, unless you actually plan on closing.  Because again, if you backed out because of contingencies, the more you mess up your reputation, and again, less people are going to want to do business with you so really protect your reputation.  It is so valuable, and again I will give you one more example about this.

There is a guy on our team that has an awesome reputation.  He’s been a wholesale investor for years.  He takes good care of his buyers, his sellers, I mean people love to do business with him.  As a matter of fact, there have been times, I know one time in particular.  He made an offer to the bank through his REO agent, and his offer was $20,000 less than the other investors.  Obviously the bank was going to lose 20 grand taking his offer over the other investors.  But you know what?  They actually took his offer even though it was $20,000 less, and the reason is, is because of his reputation.  That’s it.  It was his reputation.  Because when he says he’s going to close, he actually closes.  He does what he says he’s going to do.  So even the banks will start to learn about your reputation, and because of that, they’ll start feeding you deals and they’ll actually want to do business with you.  Your reputation will save you and make you a lot of money down the road.

I know I spent a lot of time on that, but it is so important because I think a lot of people out there really don’t care about their reputation.  They think there’s plenty of people to do business with, they think you know what?  There’s thousands of people to do deals with in my area, I don’t have to care.  Listen, I don’t care who you are, I don’t care how big an area you live in or you’re doing business in, your reputation will catch up with you.

So anyway, those are 5 keys, that professional real estate investors use to present a strong offer on a property.  So thanks for taking the time to watch our video and please, go to YouTube and subscribe to our channel and that way you can get more free videos as time goes on and also, go to our website.  We’ve got a lot of videos, a lot of training, and it’s all free, and we’ve got some really powerful tips to help you make money as a real estate investor.  As a matter of fact, we’ve got a gentlemen that made over $50,000 his first month as a wholesale real estate investor.  Just part-time!  So if you’d like to know how he did it, there’s a free video you can check out at our website.  You can see exactly how he made over $50,000 his first month.  So once again, thanks for joining us and as always, dream big dreams and go to work.  See you next time.

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property offer, offer on a property, making an offer, earnest money, real estate investors, real estate investing, properties, wholesaling properties, make an offer, close on a property