All Forum Posts by: Paul Timmins

Ryan

You always want to work with the listing agent. They are dealing directly with the seller and can give you the best info.

You want as many agents as possible working with you. You explain you are interested in their Listings only, you only deal with the listing agent as you have too much respect for the commission process you want them to get full commission. If the listing agent asks to have you work with someone in their office that is different you can work with that person.

If an agent asks for your criteria and you don't make it clear about the listing aspect, they will program in a minute a loop that will search MLS each day and send you an email announcing the deals that fall into your criteria. I don't think setting up the loop one time justifies the commission split.

Paul

Sandra
Congrats on your coming first meeting. Read below to maximize your success.
Paul

Your First REIA Meeting

One of your most valuable activities that you need to do ASAP is attending your first REIA club meeting. The networking, deal making, team building and source of local education will be found at the meeting. You will want to get the most out of you time at the meeting to make it a profitable experience. So let's get started.

Finding the Meetings
Lets check out "Real Estate Investment Clubs" Massachusetts on Google. The first result www.ReiaClub.com produces ten REIA clubs across Massachusetts.

I visited several of the club sites and found additional clubs listed. I notice a search site for National REIA http://www.nationalreia.com/clubportal/795files/directory.cfm?clubID=795&pubmenuoptID=11912 I follow the link to Massachusetts. There are three clubs listed which are associated with the National REIA. This is important because you will get additional benefits through National REIA.

You can also search Yahoo, MSN or Google groups with the same search criteria. Some of these groups have an online only presence where you can visit and interact in advance.

Prime the Pump
Let say you have selected the group but find that the meeting is two weeks away. You need to prime the pump. Go onto the clubs website my local favorite is Eastern Massachusetts REIA http://www.EasternMassREIA.com When looking at a club I want to see a variety of activities and educational opportunities.

I look to view who is listed on the Contact Us page. I would select at least one staff member and contact them. Ask them about the club, how many members and how many show for the typical meetings. Tell them you will be coming to the next meeting. They will be looking for you ready to introduce you to certain members.

Business Resources/Vendors
Check out the listed Business Resources/Vendors for the club. Call several, tell them you will be coming to the next meeting. Ask them what they think about the group. When you see them at the meeting they also will be introducing you to different people. This will jumpstart your networking.

30 Second Commercial
You need to develop and practice a couple of different 30 second commercials. You will use these when speaking to other who ask “So what are you doing”. It does not have to be too detailed. You can describe further anything they question you about.
Networking
If the meeting begins at 6:30pm SHOW UP EARLY. Get there at least 15 minutes early. This is a great chance to speak with the club officials and introduce yourself. The meeting will begin with an open networking session. In a very relaxed setting you are encouraged to interact with everyone else. Your goal is not to simply collect business cards, rather collect conversations then business cards. When speaking always ask the other person what they are doing, ask a couple of questions to continue them talking. Eventually they will ask you what you do. This is the opportunity for your 30 second commercial.

HINT: Members of the REIA will have formal name tags, new people like you will have paper nametags. You want to speak to everyone with a paper tag. These people can be a great resource for you. Some of these people come to the meeting because they have money to invest. Find them they might as well invest with you.

Announcements
The seats are taken when the networking period is over. You will hear some general announcements and an introduction to the topic and speaker for the evening.

Presentation/Training
A guest speaker will present a topic for their presentation or training opportunity. Often this will be paired with a pitch to buy something. You will get excellent information from the presentation and learn about opportunities.

Coming Club Events
The group leader with describe the events coming up over the next 3 months or so. Listen carefully find the session that will be a benefit to you.

Who has a Deal
One of my favorite parts of the meeting is when the members with a deal can stand up in front of the group and present a deal to everyone. Watch the different ways properties are presented some are more effective than others. Model your future presentations after the exceptional ones. Some people will have pictures and further information to give in the back of the room. Talk to these people about the deals later. Learn how they push the good features of the deal.

End of Meeting Networking
Don’t be in a rush to leave. You have a second chance to network. Make the most of it. ?

Josh

Expenses should be 35% gross, higher expenses could mean capital items under R&P.

Could be a value play if you can lower expenses.

Lousy unit mix should be 2 2 bds for every 1 bed.

What is the historical occupancy and turnover rates.

Paul

Tony
Couple of thoughts...
A buddy goes door to door in neighborhoods for the local politician. He keeps his eye out for opportunities

Have your agent give you daily the MLS expired listings. Call them alert them their house is no longer marketed they will not know your a hero. Ask them why it didn't sell. Explore with them their pain. Ask if they want to sell quickly for cash... if they don't tell them you have an excellent broker they should talk to,, get a referral for the listing.

Paul

Chris

It is more valuable to determine how much YOU want to make.

I have 2 buddies doing wholesaling one makes over 100K but can do a deal for as little as 1K if it only involves 2 phone calls. Another wholesaled a deal each week for a year 15K each earning 60K a month for properties they didn't own.

Flipping I have a friend who target 50-60K per deal, he is trying to build up to a deal a month.

For Cashflow the formula is 100 month profit per unit. If your goal is 10K month then you need 100 units. If you will be giving the investors 50% of the $ then you need 200 units. If you buy duplexes you will have to buy alot of them. Buy bigger you could hit that target in your first 3 deals.

Paul

James
Expenses at 50% seem high, should be 35%.

Check with ARM certified Property managers in the area from IREM.org. Ask them what they see expenses per door for a property that size also what they see them selling for per door

Greg

Great job. I suggest a good Real Estate CPA with cost segregation and the like you should get tactics to minimize taxes.

A buddy put together a list of important tax changes for 2013 below.

Paul

Steven
2 checklists for you
Good luck
Paul

Doin the Due BEFORE the Site Visit

OK, you have presented a LOI; if accepted, you will be doing a site visit. BEFORE you go, you want to do as much Due Diligence as possible. The following are ten steps you must complete before you go.

Google Everything
You will want to find out as much as possible about the property. Google the property name. Check to see if there are any comments or reviews of the property. Google the property address, street and area. Look for any problems or concerns, these may become value plays for you.

Local Police
Check the local police and sheriff websites. Search their online database for crimes in the area. Look for the community policing contacts. Call and speak with them. Tell them you are looking at a property in their jurisdiction. Do they know the property, is it causing problems for them. What do they feel about the area? Is it an area they would want their daughter around at night? Is there a local Crime Prevention group for the neighborhood? Who would be a contact person?

Local Fire
Check the website of the local fire department. Often you have the ability to check for previous fires, chemical issues and ambulance transports. Are many of the calls in the area drug related medical events? Call the local fire station, not the emergency number, when its quiet. Have a conversation with the desk firefighter. Do they know the property? Any trouble with flooding in the area? Do they have problems with the building’s fire alarm? Any underground storage tanks on the property?

Local News
What are the local newspapers? You want the daily, weekly and monthly publications. Check their online articles searching for crime, economic development, job growth, infrastructure improvements, the location and property. If there is a college in town check the college newspaper, and any off campus guides they have. See the area from the students perspective. Check the local business newspaper. See http://www.newspapers.com/ to search for newspapers by area and content.

Chamber of Commerce
Call the President of the Chamber. Tell them you are expanding your real estate holding into their area. What can they tell you about the current business climate? You can say you are looking at a certain property right now. Do they know anything about the area, etc. Ask for referrals, Who do they like and know in the local banks, best Real Estate Attorney, Property Inspector, Property Management firms. Remember you will be getting good referral names as well as their strong name drop.
Economic Development Office
Access the state, county and city/town Economic Development office websites. Draw up any reports on the site which talk about job growth, local support for improvements. These reports are helpful for noting trends and statistics that you can use for your business plan and property package. Call the local office, ask about area development, the specific area your interested in. Are there any local funding sources to access for improvements?

Property Management Companies
Not counting the current property management company, call at least 3 other companies. Have a discussion with them, explain that your company is moving into the area. Do they know the area, the property you are looking at? Is that property something they could manage? Ask what they are seeing for local per door costs. The property manager should offer to drive by and look at the property for you. Their experienced eye will give you a huge advantage.

Shop Competition
Call adjacent properties see what their rates are, ask about their property-any vacancies? Tell them you are looking at the other property, how does their property compare? Call several adjacent properties, you will notice some trends. If the property package lists recent comparable sales, call those properties and gather information firsthand.

Financials
Get the strongest financials you can. If you have presented the offer, they should provide you with more accurate documentation. The rent roll is going to show the vacancy rate and history. Any sweetheart deals, long lease, or noticeably lower rent? Are they short or long term leases? Were a number of apartments recently rented? Discover surprises now not later.

Your Local Team
Line up your local team members. They include: Property Management firms, Real Estate Attorney, local Real Estate brokers, retired banker, bird dogs, etc. Arrange a schedule to meet with your local team members on your site visit. Include the advisors in your team, chamber president, economic development office contacts, local landlord association and local REIA contacts.

Due Diligence Site Visit Checklist

Prior to Visit
• Detailed Financial Records
2 years rent rolls, Profit and Loss Statements
• Independent Confirmation of local number per door costs.
• Create Local Team (Attorney, Brokers, Property Managers, Property Inspectors etc.)
• Identify Funding Options-Local Banks, Investors
• Arrange Agenda Set Up meetings

Site Visit
Day 1 Agenda
• Fly in Late Afternoon
• Obtain Rental car and Hotel Check in
• Attend REIA Club
• Drive properties
• Stop at the local police branch and ask them if they have any crime reports

Day 2 Agenda
• Meet RE Broker #1 at property
• Meet RE Broker #2 at @ Office
• Lunch with Local Lender
• Meet RE Broker # 3 at Office
• Dinner with RE Lawyer
• Drive Path of Progress

Day 3 Agenda
• Meet with Appraiser
• Meet with Property Manager #1
• Meet with Property Manager #2
• City Hall Meet with Economic Developer, Building Dept and Assessor Office
• Lunch with Litigation Attorney
• Meet with Property Inspector/Engineer

Post Visit Follow Up
• Continue relations with your local team
• Reach further into the market increase broker connections
• Arrange Quarterly Inspection of Acquired properties
• Increase local contacts

Property Inspection Checklist

Neighborhood
• Main road?
• Near downtown?
• Near Hospitals?
• Near Transportation?
• Near shopping?
• Near city hall?
• Near park?

Exterior
• How Many Buildings?
• Type of Roof, Age, Warranted ?
• HVAC
• Foundation
• Exterior Walls
• Stairwells
• Landing

Individual Units
• Appliances: Refrigerator Stove Dishwasher
Who supplies them? Condition?
• Kitchen:
Condition of Fixtures? Sink? Cabinets?
• Bathroom:
Condition of Fixtures? Sink? Tub/Shower? Cabinets?
• Flooring
Carpets: Condition? Other Flooring
• Paint:
Condition?

Laundry
• Washer/dryer hook-ups in units?
• How many washers and dryers are in the Laundry Room?
• • How old?
• • Condition?
• • Laundry service contract?
• • Company?
• • How much do they take?
• • How often do they repair? Replace?

Services
• Who provides phone service?
• Internet Cable
• How long are the contracts?
• Who provides the utilities?
• How long are the contracts?

Deal
• Lease Audit
Must be Complete and Accurate Match Current Rent Roll to Leases
Conduct Lease Survey Determine if Certified Lease Audit is Required
Randomly pull 1 out of every 4
• Check Security Deposits, Expiration Date, Lease Amount, Utilities, other Charges i.e. Pet
• Document Discrepancies such as
Security Deposits on Lease but not on Rent Roll
Lease Amount on Lease different than Rent Roll
• Typically 1 or 2 on a 100 units will not match
• A Pattern of Discrepancies triggers a Complete Lease Audit
• Work Orders
Review Work Order Request Log
• Common problems
• Response time
• Gather Additional Data when walking complex with Maintenance personal
• Walk Each Unit
Typically 3 -4 common unit layouts Look for Reoccurring Problem
Bring Unit by Unit Inspection Notebook
Verify the standard Dial-in Number of $400 per door
Process goes faster when you get use to the layouts and the Unit by Unit Inspection form
Get into every unit
• Quick Walk Through
Have Property Manager opening units ahead of you.
Enter Unit check the carpet and blinds as you go to Kitchen
Kitchen check Appliances, Cabinets, C’tops, faucets, area under sink , & flooring
While walking thru Living Room to the bathroom check ceilings, walls and windows
Bathroom check Toilet, Vanity, Sink, Tub Flooring and the Condenser Unit above the tub
Check Hallways and Hot Water Tank on route to the Bedrooms
Bedroom: scan walls, closet, ceiling, windows and flooring.
Ceilings : look for past and present water damage (square sheetrock patches)

• Shop the Competition
Pick up the Local Apt Guide Competition Rents 3 closest competitors
Market rents: 1BR 2BR 3BR Rent concessions? Where? Why?
• How long is the burn-off?
• Occupancy Amenities

Edsiaren
I deal with a number of active personnel and some retired. I would say all active would say start while active. We have an excellent climate in real estate for the coming 4 years take advantage of it.

One guy I know is AF he did his first deal while deployed and has not looked back since.

Another guy uses his active status to invite potential investors to the military balls, a great way to impress them.

I am sure whichever way you chose will be best, good luck and let me know if you need anything.

I appreciate the job you are doing. Stay safe.

Paul

Brandon
Entertaining might be the best description. I have a problem when someone rates others without correct info then points you to buy their product.
With so many different types of approaches and trainings it comes down to which is the best fit to you.
Paul