Presentation Transcript

1. Quick Real Estate Cash Flow Profits Mastery Course

2. Module 2: Identifying Target Properties This module we will be discussing the stages that are involved with getting a deal done. At the end of this module you will have an understanding of how to locate deals, how to analyze deals, and how to determine market value.
3. Step #1: Identifying Your Target Area One of the most efficient ways to determine the areas that you will be focusing on is to literally map I out. My recommendation is to get a map of your city – preferably a wall size or larger map if one is available. Place a push pin on the map in a distinctive color which identifies where you live
4. Step #1: Identifying Your Target Area Use a different color marker to identify what would be considered “war zones” or the undesirable areas of your city. Draw a line around those areas so that you can quickly identify which zip codes that you will want to avoid.
5. Step 2: Determining Market Value In the back office you will find a copy of a The Property Information Worksheet. This is the sheet that you will fill out for every property that you are looking at. You will also need to be prepared to take photos of the property with either a camera or your camera phone.
6. Step 2: Determining Market Value Some properties that you look at will require repairs in order to be inhabitable and some properties will be turnkey and not require any rehab. If you are dealing with a property that will need some additional work – you will need to determine the ARV (After Repaired Value) of the property.
7. Step 2: Determining Market Value WAYS TO DETERMINE THE ARV Develop a relationship with a realtor that will give you access to the Multiple Listing Service (MLS) in your area. (You may be able to Google “’your city’ MLS Listings” and find a site where you can gain access directly online. Subscribe to a database that allows you to tap into the tax rolls so you can access your own market analysis. You can investigate a service of this type in your area.
8. Step 2: Determining Market Value WAYS TO DETERMINE THE ARV 3) If you are contacting a seller directly ask the seller directly what he/she thinks their house is worth. Then ask them what they think it would be worth in excellent condition. Inquire of them how they arrived at that number. Sellers are notorious for inflating values so this will likely not be an extremely accurate number unless they tell you that the value came from a recent appraisal or an agents analysis ( also known as a BPO- Broker Price Opinion). Please keep in mind that if the sellers value came from the tax assessment on the property – it is usually a lot lower than the actual real market value.
9. Step 2: Determining Market Value The best way to determine the value of a property is to compile information on the following items in relation to the subject property: Recent sales in the area How close they are in proximity to the subject area. 3) Similar in square footage to the subject property.
10. Step 3: Locating Properties One of the easiest and most effective ways to locate properties fast is through Craislist.org. Visit the Craigslist page for your area (ex. www.atlanta.craigslist.org) and look in the housing for sale section. a) Put in the search bar at the top of the page the terms (one at a time) “for sale by owner” “must sell quickly” “Fast sale needed” “motivated seller”
11. Step 3: Locating Properties You will find GEMS on Craigslist! I recommend searching Craigslist ads DAILY as new listings pop up all the time. If and when they do, you want to make sure that you are getting first mover advantage on those properties.
12. Step 3: Locating Properties 2) Drive around and find properties in your target area. Look for at least 20 homes in your area that you feel are good targets for making offers. They should be moderately priced homes that are priced under the $150,000 price point.
13. Step 3: Locating Properties What type of properties should you look for? 1) Properties that need work. The more work the better. Do not overlook condemned or boarded up homes, these are prime prospects. 2) Vacant properties are preferred but not required. 3) Single family homes. 4) Low priced, working class to middle class areas.
14. Step 3: Locating Properties 1) It is important to take a photo of each property. a) Preferably the front and back of the house if it is vacant. If it is occupied, only take a picture of the front of the house. b) Be sure to take a photo of the houses on either side of the subject property. This will give you and your perspective buyers insight into how the neighborhood is kept.
15. Step 3: Locating Properties c) If the house is vacant, take pictures of the inside of the property if you can gain access to the inside or just take pictures from an open window. d) Complete the Property Inspection WorkSheetincluded in the back office of this course for each property. e) Once you have inspected 5 or more properties and completed the Property Inspection Worksheet attach pictures of each property to the sheet. (the front view, back view, and neighbor homes, along with any additional pictures you were able to take. Clearly mark each photo noting which is the subject property and the neighbors houses.
16. Step 4: Narrowing Down the Winners There are some things to keep in mind when you are analyzing properties. Make sure that your properties have these traits: Preferably vacant (although this is not mandatory) The asking price is at least 20% below ARV ( this is not mandatory) Property is at least 3 bedrooms/ 2 bathrooms. Property preferably has a lot of equity or is owned free and clear. Needs repairs ( this is not mandatory) Motivated Sellers ( mandatory) these are folks that NEED to sell, not want to sell. They are motivated by job loss, tenant problems, relocation, death in the family etc.
17. Module 2 Homework Your assignment this week is to run through Steps 1-4 as listed above. Find 5 FSBO properties on Craigslist. Find 5 Properties from Driving around. Take pictures of the properties that you have driven by and place them with the Property Information Worksheet.
18. Module 2 Homework 4) Research comparable sales of these properties based on the instructions listed in this module. Email this completed assignment by Wednesday at 7pm of next week to tramayne@bendrossenterprises.com