Archive for September, 2012

Register for our next REAPS meeting on Thursday, September 27th.

REGISTER HERE:

http://www.memberize.com/clubportal/EventDisplayNew.cfm?clubID=173&EventID=158053&mo=9&tDate={d%20%272012-09-28%27}

Our guest this month:  Jillian Sidoti

How to Raise the Cash You Need to Buy any Real Estate Anywhere

Jillian will also be hosting a full-day training for REAPS on Saturday, October 6.

**2 PHP Credits in Finance**

REAPS is excited to have Jillian Sidoti as our September guest speaker.  Jill teaches real estate entrepreneurs, (beginners and seasoned veterans), the ins and outs of raising private capital. A beginner will learn the ropes of private money while the veteran can learn the greatest tips and tricks of finding private investors. Her program is designed to teach the student legal compliance and effective money raising techniques in a thorough and easy to understand manner.

Jillian Sidoti of the Law Office of Jillian Sidoti is the expert on money raising techniques for real estate companies. After working in commercial real estate doing condo conversions for many years, Jillian started a firm that specializes in securities transactional legal matters such as Private Placement Memorandums, SEC compliance, Regulation A filings, Direct Public Offerings, and Intrastate Offerings.

Jillian also spends her time speaking at seminars educating real estate investors on how to legally raise capital for their real estate investment projects.  Prior to her legal career, Jillian owned and operated a record label enabling her to tour worldwide with artists, including visits to South Africa, Canada, Europe, and the United States. Using that experience, Jillian has been commissioned to write articles and contracts for many music industry entities.

Currently, Jillian teaches Finance and Accounting for the BS and MBA programs at the University of Redlands, drawing on her experience as Financial Analyst, Controller, and CFO for many companies from manufacturing to real estate development. Jillian also teaches a Small Business Management class where students are taught the anatomy of a business plan.

REGISTER HERE:

http://www.memberize.com/clubportal/EventDisplayNew.cfm?clubID=173&EventID=158053&mo=9&tDate={d%20%272012-09-28%27}

“REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

 

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Sep
10

Rules For Flipping – Part 4

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Rules For Flipping By: James Dainard & Robyn Woodman

10 Rules When Purchasing An Investment Property To “Flip” – Part 4

In our last post, we covered Rule 7 and Rule 8 of the “10 Rules When Purchasing An Investment Property.” As with the previous Rules, these next two can and should be done well in advance of purchasing a property. When evaluating your property you must clearly understand your competition. Is the neighborhood littered with bank owned properties that need a ton of work, or are they top of the line properties that will fetch the highest price? You must remain level-headed about the property and not “fall in love
with it.” This is not your home. There is no need to upgrade to the top of the line granite you found last night on Pinterest just because you “really like it.” All you want to do is upgrade the house to the highest standard of your immediate market and sell it. This is all about bottom line. You are not living here. Keep your eye on the prize: the return on your investment!

9. Know Your Market Competition

As discussed previously, knowing how to comp out your property, as well as accurately identifying your market competition is mission critical. If the entire neighborhood is comprised of empty nesters selling their family homes they have lovingly maintained for 20 years, it’s probably a fair bet that the bombed out REO you just bought needs to have all the bells and whistles that they have in their homes in order to be competitive. However, if the neighborhood is a mixed bag of starter as well as more opulent homes, then
upgrade the 2-bedroom 1-bath 1200 square foot property you just purchased to compete with the starter homes and you will be sitting pretty. With that size of property, you cannot compete with the 6-bedroom larger estate two blocks over; even if you pull out all the stops in the kitchen and drop in a Viking range, double ovens and a sub-zero Wolf refrigerator. Save yourself time, cash and identify your competition upfront while establishing a solid game plan.

10. Don’t Fall In Love With The Property

I cannot even begin to tell you how often I see a love affair bloom between a new property flipper and their very first rehab. This is a money making opportunity, pure and simple, and it should be treated as such. The upgrades made to the property should be only enough to fetch the highest selling price.  There is no need to get creative with upgrades or make costly and unique architectural changes to the property. Not only do they cost more, but they also increase hold time eating into even more of your profit. Even though there could be a dozen “really cool” things that could be done to the property, the fact is, it doesn’t matter. Notice I called the
house a “property” not a home. Think of your flip in those terms and you won’t ever go astray. If you plan on doing multiple flips, pick a punch list of attractive items that you repeatedly reuse in each property. It takes the guess work out of the equation. Or if you find
yourself buying in different types of neighborhoods, consider a couple of options based on the quality and upgrade. The same cookie cutter approach can be applied throughout a property even down to paint color, bathroom fixtures and cabinet handles. Using this approach does not make a property any less appealing to the prospective buyers, it just enables you to work your bottom line in your favor.
Need some advice or have questions?
Give the experts at Heaton Dainard a call. The team has completed hundreds of transactions and can give you assistance on choosing upgrades that are desirable and will appeal to a wide range of buyers. Visit the experts online at:  www.heatondainard.com for more information.

About the author…
James Dainard is one of the founding partners of Invest Now, LLC, the largest wholesale property company in Washington. He has been buying and selling real estate in King, Snohomish and Pierce county for many years. He graduated from the University of Washington Business School with a focus in Finance and Marketing. Over the past few years James has been actively working directly with investors purchasing real estate, providing them with multiple exit strategies and supplying them with the various
different lending sources.

REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

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Sep
08

Rules For Flipping – Part 3

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Rules For Flipping By: James Dainard & Robyn Woodman

10 Rules When Purchasing An Investment Property To “Flip” — Part 3

In the last post, we covered Rule 5 and Rule 6 of the “10  Rules to Follow When Purchasing an Investment Property.” Now you understand the importance of knowing the value of the home and its comparables (Rule 5), as well as clearly understanding all of your financing carrying costs (Rule 6). Both are crucial for turning a profit on your investment property. Just like the previous rules, Rule 7 and Rule 8 should be done well in advance of purchasing a property. You should always approach a buying situation with a “magic number” in your head. If you cannot secure the property at or under the “magic number,” then you’re out of the game before you even got in. GET OUT. Exit Strategies should be approached in the same manner. This is not something you want to figure out down the road. Having a plan will save you bacon every single time!

7. Stick To Your Price

The most common mistake that beginning real estate investors make (and let’s be honest, seasoned ones as well) is paying too much for a property.  In a competitive market, investors can become frustrated and rush to get into a deal. The investor that possesses selfcontrol and patience will be rewarded handsomely in the end. Have confidence that you will find the right property for the right price with due diligence. Always remember that overpaying for a property is a much worse scenario than missing out on the property entirely. If you purchase an overpriced property, you must cut project costs somewhere else. Whether you need to lower

the quality of improvements or leave off the half bath needed for additional profit, this is not a fun decision to make. Do yourself a favor and set your highest price up front. Stick to your guns and walk away if necessary. A rash decision can turn into a very costly mistake later. Whether you are purchasing a bank owned property, a straight sale on the MLS or bidding at the auction, don’t make the mistake of getting caught up in the moment just to “win” the property. Sometimes the “winner” turns into the loser.

8. Exit Strategies

As discussed earlier, sticking to your purchase price is important for your bottom line. Once you know the end point, work back to your beginning purchase price. A savvy investor positions the investment property for several exit strategies in case one falls through. Let’s say that you find a 3-bed 1-bath rambler in a great neighborhood that has solid bones, but it needs some cosmetic work as well as an addition of a full bath to achieve its maximum value. You are familiar with the comparables in the area and you are confident that there are a few exit strategies available. Let’s take a look at some of your options:

  •  Make the renovations based on what the neighborhood dictates. Sell the home for a tidy profit and move on to the next project.
  • Rent the property at market price for cash flow.
  • Lease Option the property. This provides a non-refundable option fee up front, higher than market rent and a potential buyer. If they don’t buy the place, no worries; just rent it again and keep the fees.
  •  Sell the property and seller finance all or a portion of the home.

Each of these options is viable depending on the details of the deal. Need some advice or have questions? Give Heaton-Dainard a call – they have the expertise to help you pinpoint several lucrative exit strategies for your investment property.

About the author…
James Dainard is one of the founding partners of Invest Now, LLC, the largest wholesale property company in Washington. He has been buying and selling real estate in King, Snohomish and Pierce county for many years. He graduated from the University of Washington Business School with a focus in Finance and Marketing. Over the past few years James has been actively working directly with investors purchasing real estate, providing them with multiple exit strategies and supplying them with the various different lending sources.

REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

 

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