are
rising deal
out what may
out a deals can be profitable you for you
to keep long-term for you to flip do a quick look make some cash flow
and what the person you're so it was going to do with it
was gonna make sense for them we've covered a whole bunch of things in the
past year 9 videos
about this process the next
YouTube videos I'm going to cover specific deals each videos gonna be a
specific deal
and I'm gonna read emails that I perceived
from you guys and I'm gonna
talk about the deal and a lot of these
emails I received have incomplete information
so I'm gonna say here's what you need here is some information that you need
to analyze these deals
but you don't have and hear the different ways that might to play out
if it works now also keep in mind a lot of these deals that you've sent me
don't make sense they're not going to be profitable but they sound profitable on
the surface
summer show you I read these deals i wanna talk about
what makes sense and what doesn't and home you might be able to turn them into
money
even if even if they don't make sense on the surface
so let's get started this first one me is from my answer was your folks have
yes we did username some folks in just give me a first name
and where they're from or whatever someone I'm gone it's gone
read it as a cop as for sums from John in High Point North Carolina
uses I've acquired for closure
for thirteen thousand seven hundred dollars that needs ten thousand dollars
in order to be habitable
hits in high point north carolina about two blocks from major shopping center
and giving its just about everything it it's about sixty years old
two bedrooms one bath new kitchen cabinets for a new water heater
base for stop right there I for civil
and other stuff matters at the beginning you don't need to know
anything except the numbers at the beginning
if you know the numbers and the numbers make sense ban bee stings
that access becomes important to know or sometimes valuable to know
sometimes you don't need about it doesn't matter but
let's just stick with the numbers when we finish
p talks about the size the house the bathhouse be
we had a sweep European it's an out we have to take a moment
you know on about things that really honored
the important part of it now I can understand everybody would feel that
these are important
user important due diligence issues and I appreciate you submit to men are
trying to beat you up
the John for this so did
don't take this personally out but what i'm saying is first
look at the numbers art so now uses be after repair value:
and the brokers price opinion or about forty five thousand dollars
and properties in this area only commandments for 44 four hundred fifty
dollars a month
which is why not screen for the additional 25
dollars and air conditioning to the house I would like to
likely hoping I could and so I miss property alright so let's look at the
at the numbers on steel had to go get my handy dandy
HP business calculator that I have had for 25 years
you see it even coming apart p seems here but it still works wonders
and I still love it I've got like to have him since then I keep losing
so the swings sticks with me somehow I don't know why
so what's were seized at 37 they can buy the property for post ten thousand
dollars repairs
the meat is gonna by these properties for 23-7 he
he thinks he can get for four hundred fifty dollars a month
for the for the property now we don't know he didn't give me the tax
you can come on the properties refer to the text on the properties we don't know
how much that's gonna be
but let's say but it's a hundred dollars a month at be probably pretty average
for a program like this and let's say that the
taxes or the insurance is gonna be around thirty-five dollars
a month theater before us is gonna be forfeited dollars a month
times 12 I'm is fifty four hundred dollars a month subtract from that
1200 hours for taxes the year but subtract from Matt
a four hundred dollars year in insurance
accuses 38 n rollers
not subtract another five hundred forty dollars
which is 10 percent a fifty four hundred dollars I'm
for the property management that leaves us with 3,260 dollars
I love net income ahora probably like this
assuming which a paid cash for their property
now if you take that 3260
and divided by your total investment which lets say is 23-7
you return on investment is 13
2.76 percent its okay
it's not great you might be able to make more money by reducing the amount
very costly to repair the property you might be a little bit more RAM may be
converted to a section eight tenant
sexually typically pays a little bit more than market rent
or some other things have changed right now we've been getting
letters from sexually from Howard on properties we have section 8
reducing the amount that their pain for properties which means
it's not he knows personally it's hitting overturn its
which is going to make it harder to find tenants for properties to
to get higher amount so rivers and fifty a hundred dollars a month
you know him potential rental income
on those properties so if you didn't 13 percent return is that enough to go to
investors say hey would you like to buy this thing for
in a 23-17 might go forward to get that thirteen percent return
that might be enough for investor but you gotta make a profit on
as well so if you're gonna make a profit on a ferry you know so you wanna per
10,000 hours
on to that but for bringing up to 33,000
and you're still get that 3200 my you said 30 to 60 on it
that means now the investors a ten-percent you meet a dozen other
property investors now
10 percent return it could be a lot harder to sell then
you know a 15 percent were eighty percent return
and have been so i'm used to investors on my list I got a big list
and I don't give investors for dinner to buy these properties from re
but when I put them on the market typically will sell them
with one or two emails a game so pretty quickly
if I market then went 15 16 17 percent
because there's no place but people can get investors like this
better this good deal usually is his I sell them to people
the have known me war that have what my programs or
have been on my list for a long time who have some level of trust for me
and feel comfortable with me so that's what that's what you're gonna have to
develop gonna be so in two other people
you not to be in your town you don't have to you know your family
you don't have to be through your social network they just need to
to know who you are and by building
a list of investors like I've done it's made it very easy for me to do it
and my teaching it to help folks few
more trustworthy so because they see my face the field you can look like a
regular guy doesn't look like it's gonna rip me off
and then I also nobody says now
too many people say bad things about me because
I've trying to do. you know ethically
on through this whole process and by doing that and haven't
you know acting that way business makes it possible to do long-term investing
to be able to solve this problem long-term builder Investment Group were
people will buy
multiple properties from so
use this a good deal to buy I would not buy
I would buy this property I wanna see higher return
we're buying properties that are similar to this European
a little bit more than that but our return or rats are
are a hundred dollars 850 you know and when you can get a hundred dollars
for the same property in a different town that's where you should be looking
so start looking at other towns we could do the same thing
demand higher rents if you previously in an area that has Lawrence
you can have a harder time make it make sense
for investors now with that sir
let's look at the about these by another market value
if he buys it for a 23-7 and why we again that's 37 poster tend to repair it
was gonna sue is going to be
in pretty darn good condition by the time he turned around the salsa
puts it on the MOS he thinks that the after repair value: as 45,000
the first thing you have to question is used to have value
real and if you're not by its own water properties
we're not talking to somebody who is then you're probably not going to be
accurate
on your values right now camps or
the most inaccurate I've ever seen and to think that you're 45,000 that may be
very realistic
it may be true and you know broker me tell ya this is
this really is this value really is here and if that's the case
and you bought it for 23 /7 sold for $45
any figure that throughout 10 percent
in Kos your about 40,000 that you actually get out of the property
I mean you that's a pretty good return that's what is it 716 seventy thousand
dollars
a profit that's a pretty good record if your soul
but how long you have to hold it before you get so
if it doesn't solve the only way to sell a property when you're on the MLS
if it's not so in is easy to fix it up so that it brings the value up
and you're competing with other properties or lower the price
you know the the MLS is a good solid marketing
tactic and it will work if you are priced properly for the market would
people buy
on average or they look at on average between 1823 houses before they buy one
if yours isn't the best one of the bunch they buy another one
and all you did was so serve to so your competitor
so you've got to be able to compete with properties
better that are priced equal to yours
if your property is as good as the other properties priced years but they're
gonna buy something else
so that means you lower your price if it doesn't sell
and loss or substitute 6 I could give you and I
teachers to my to my mentor students on the preferred method
about how to tell whether property is priced right or not
because there is a way to do it there is a way to analyze that process
and not take guess for an answer you could
your price: a proper that you test the way you saw it try to get the top dollar
for
because it's all about time and money the higher the price to longer to take
you to so
you probably saw any property at any price if you wait long enough
so just a matter can you wait is a take you know month
to take six months is year to take 10 years for the values to come
to wear you know where you can sell it at that price eventually the
it's your time for its money if you want to sell it quickly
who sought within the normal span of time
them you need to lower the price so you could be holding onto this property
with this twenty three thousand dollars investment with no money coming in
for months and months and months six eight 10 months 12 months
these two old is properly dropping the price all on
where you get down to suddenly and if you do the work to the house
yourself you know you know make a two dollars an hour from the work you put
into it
it's not worth it anymore so you wanna make sure that if we gonna do this
I wouldn't suggest an exit strategy by infection up its own
right now I don't think it makes sense because if you try to sell it for cash
all its gonna do is you can have to go to the
to lenders and your buyers would have to lenders
every buyers to lenders going to be hard for them mood right now
so I wouldn't put yourself in that position because it's good he w Capitol
on the other hand if you could buy this property description thirty percent
return
i think is too I think you should be making because you know you know 15-18
you know 25 I probably average thirty
to 35 percent return on the properties in a bind because the way will Bynum
just by putting units in there and that doesn't count
the old equity born into I'm turn around so I those properties to folks
where they're making between 15-18 percent return on their investments plus
you talk about Corey so make sense to them if I sell
and it whenever any cash flow when I need you need capital or wanna buy more
these
but also a few of them off and by a few more
to to replace them and black cat for top
and you could do to save are you hope it helps with you