All Forum Posts by: Ryan Bilby

Great post on sellers sharon

People are definately not rational beings most of the time and especially when dealing with the sale of their home. To them it is not just property but part of who they are, especially if they have lived there for a while.

I think its good that you follow up because that is a great way to build repoire with a potential seller and if they end up lowering their price they will be more apt to deal with you because they have ytalked to you several times

Congrats

I'm new as well and am about to start going to the local REI clubs. I'm in San Diego so there are 4-5 clubs that meet once a year. Hopefully my experience will be similar to yours.

Here is our revised business plan.

We took your advice and tried to implement it into our revision.

We focused on one area (Sacramento) and also tried to clarify some of the sections more clearly.

In regards to our end buyer, our main goal is to market the property to all buyers and look to turn the property quickly by offering an attractive price to cash buyers and investors looking to buy and hold.

I would also like your comments in terms of the structure of the plan. is the way we set it up acceptable? are we leaving anything out that is crucial? should we take out anything that isnt needed?

all comments welcome.

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Mission Statement: Our mission is to buy discounted properties in lower income neighborhoods, fully renovate them, and sell them for a profit.
Objective: LLC purchases single-family and multi-family residences in the Greater Sacramento region. Our focus is to build capital for the business by acquiring, rehabbing, and competitively pricing each property with the intent to sell quickly for a short turnaround time. Our timeframe from acquisition to sale is 90 days. We target properties that can be purchased at 65% or below of the after rehab value (ARV). The properties we purchase need light to medium renovations not to exceed 20% of the acquisition cost (case by case basis if more than 20%) in order to meet or exceed comparable condition of homes in the area. The value of the homes, after repair, are up to $170,000.

Market Analysis: We invest in properties in the Greater Sacramento area. The properties we target are low-income single family and multi family residences. This allows us to capture a large buyers market given that the medium income in Sacramento is $42,000, allowing for them to purchase houses within our price range, and also due to the large number of real estate investors locally and in the Bay Area. There is also a high demand for homes in this price range due to favorable interest rates and current home values.

Criteria: We invest in residential real estate by purchasing homes from motivated sellers at or below 65% of the after rehab value. This strategy ensures that we secure the profit upon the time of purchase and we realize the profit upon the sale of the property. Because we only purchase properties at 65% of after rehab value, our maximum purchase price will be $110,000. Rehab costs are limited to 20% of the purchase price and anything above is looked at on a case by case basis. Our focus is on light to medium renovations with no major structural or foundational issues.

Locating Deals: There are many avenues in which to find deals and therefore do not want to limit the ways in which we find them. We utilize a network of agents in the Sacramento region to bring us potential deals, go to local auctions, and market directly to sellers who are in default.

Financing: We finance our properties through private money sources at terms which allow us to meet our target profit. As our business grows, we will attract private money sources that we can utilize on a continual basis, ultimately building relationships that benefit both us and the lenders. We will build our network by going to local real estate investment clubs, frequenting large real estate forums, and by using the internet as a tool to cultivate relationships with people who are looking to make an attractive return on their money.

Rehab Plan: Once we have secured the property and found financing, the next step is to rehab the property in order to meet and exceed comparable properties sold in the area. We first focus on the exterior to give the property curb appeal and to make the property marketable immediately. This is accomplished by improving the landscape, exterior paint, windows, etc. We then address the interior by updating the kitchen with new appliances, cabinets, and countertops where needed; updating the bathroom with new vanities and showers where needed; and the bedrooms and common areas with updated flooring, carpets, and paint. Our timeline for the rehab process is 14-21 days.

Marketing: The marketing begins once we have completed the exterior renovations on the property. We immediately begin to attract buyers at this initial stage. During the rehab process we list the property to brokers. Once the rehab is complete we list it on the local MLS and have an open house to show the finished product. We also inform our network of agents, brokers, and investors that we have just completed a rehab and are willing to sell at an attractive price in order to get the property sold quickly.

Cold calling was the first I did when I started real estate investing. I was nervous at first but then I realized that the worst thing they can say is no and in the end if i want I can just hang up the phone.

The more you do it the easier it becomes and the easier it is to accept that rejection.

thanks for the replies.

Another idea I had with the plan wasclarifying two stages in the business. First would be the growth stage where we focus on only taking the 'best' deals having a quick turnaround time (lowering the sale price if we have to) and then the second stage would be the long term where we can take on more deals and also hold properties for longer and also have the potential to hold them ourselves and rent them out.

Thoughts?

My partner and I are in the beginning stages of our real estate business. We have flipped a couple properties and would like some constructive feedback on our newly created business plan.

Thanks for looking and we look forward to hearing some constructive criticism. This is only a rough draft and havn't put in an about us yet. We chose Sac and SD because we are from these areas and know them the best.

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Mission Statement: Our mission is to buy discounted properties in lower income neighborhoods, fully renovate them, and sell them for a profit to first time home buyers and real estate investors.

Objective: LLC purchases single family residences, duplexes, and four-plexes in the Greater Sacramento and San Diego regions. We target properties that can be purchased at 65% and below of the after rehab value (ARV). The properties we purchase will need light to medium renovations not to exceed 20% of the acquisition cost (case by case basis if more than 20%) in order to meet or exceed comparable condition of homes in the area. In the Sacramento area, the value of the house after repairs will be up to $170,000 and in the San Diego region the value will be up to $250,000 after repairs. Our objective is to sell these properties quickly with a timetable of 90 days and to receive a minimum of 15% profit. We also understand the benefit of working within the community and will be using local employment to complete the renovation work on the house.

Market Analysis: We will be focusing on investing in properties in the Greater Sacramento and San Diego regions. The properties that we will be targeting will be low-income single family residences as well as duplexes and four-plexes. By targeting these specific properties it will allow us to capture a larger portion of end buyers such as first time home buyers, real estate investors, and rentals; which will increase the amount of demand and ultimately allow us to sell the properties more quickly and at a more competitive price.

Criteria: We invest in residential real estate by purchasing homes from motivated sellers at or below 65% of the after rehab value. This strategy ensures that we secure the profit upon the time of purchase and we realize the profit upon the sale of the property. Because we will only purchase properties at 65% of after rehab value, our maximum purchase price will be $110,000 in the Sacramento area and $160,000 in the San Diego area. Rehab costs will be 20% of purchase price and anything above will be looked at on a case by case basis. In the beginning stages of the business we will target cash buyers by giving them a discount on the property in order to decrease the amount of time we hold the property. As the business grows it will allow us to hold the property longer and seek out more conventional buyers, giving us a greater return on our investment.

Finding Deals: There are many avenues in which to find deals and therefore do not want to limit the ways in which we find them. We utilize a network of agents in both the Sacramento and San Diego areas to bring us potential properties and we give them an incentive to do so by allowing them to double-end the deal on both the selling and buying side. We also contact people who are in default and are looking to short-sale their home.
In the event that this takes place and the property fits our criteria, we will then act as the selling and buying agent to purchase the property in order to net a higher profit be eliminating paid out commissions. We will also go to local auctions as another way of securing discounted properties.

Financing: We finance our properties through private money sources at terms which allow us to meet our target profit. As our business grows, we will attract private money sources that we can utilize on a continual basis, ultimately building relationships that benefit both us and the lenders. We will build our network by going to local real estate investment clubs, frequenting large real estate forums, and by using the internet as a tool to cultivate relationship with people who are looking to make an attractive return on their money.

Rehab Plan: Once we have secured the property and found financing, the next step is to rehab the property in order to meet and exceed comparable properties sold in the area to maximize profit and ensure a quick sale. We first focus on the exterior to give the property curb appeal and to make the property marketable immediately. This is accomplished by improving the landscape, exterior paint, windows, etc. We will then address the interior by updating the kitchen with new appliances, cabinets, and countertops where needed; updating the bathroom with new vanities and showers where needed; and the bedrooms and common areas with updated flooring or carpets and paint.

Marketing: We attract buyers by putting it on the MLS. We also send out an email blast to our network of agents, brokers, and investors at slightly below market value in order to attract buyers and to get the property sold quickly.