Recorded: Wednesday 6/29/11
Topics:
- What makes Phoenix such a special place to invest
- Are we seeing the rise of the Phoenix
- Understand the different purchase and selling strategies
* Simply Do It
Real Estate Investing Simplified
Archives: June 2011
Phoenix Real Estate Market – Teleseminar
Private Money Or Not
In today’s economy the use of private money had become more widespread. Why wouldn’t it? It had supplied us investors with a true need – funds. So private lending has a stigma? Private money, hard money and similar names had become associated with high interest rates and hefty fees and in many instances it’s true. But they don’t have to be in all cases. I don’t want to talk about if private money is good or bad. I want to explore the right use of it.
When To Use Private Money
If you are making a long-term investment then probably the use of private money is not the right way to go about it. It makes sense if you use it as part of a bridge or temporary financing in your purchase process. For example as a strategy to acquire the property until you have secured an institutional mortgage. When you conduct a short-term investment it MAY make more sense. You’ll still have to explore it on a case by case, which is what I have done in a fix and flip investment in Dallas. (more…)
10 Main Steps For Successful Real Estate Investing
Follow these steps to accomplish successful investmenting:
- Define a clear goal or goals. If multiple goals - prioritize.
- Build a team: mentor/expert, attorney, CPA, lender, and insurance agent.
- Decide on an investment philosophy: rental property, fix-and-flip, commercial, land, etc.
- Set your financials. Down-payment required, available rates, and if needed get pre-qualified.
- Identify target areas that will help you accomplish your goal/s
- Interview service providers: Realtors, property managers, contractors, etc. Learn from them about the area.
- Have an investment plan: purchase, exit, and contingency methods.
- Identify the property.
- Put an offer and negotiate.
- Purchase and close on the property.
Links To Interesting Articles
Signs of a Real Estate Recovery?
By Realtor.org June 16, 2011
Foreclosures fall for 8th straight month
By Les Christie CNNMoney June 16, 2011
Foreclosure Filings Decline but Signs of Renewed Activity Evident
By: Carrie Bay DSNews.com June 15 2011
CitiMortgage paying borrowers $12,000 after a short sale
by JON PRIOR Housingwire.com June 16th, 2011
Invest on Auto Pilot
Achieve your retirement dreams through smart leveraging and simple investments
The statistics about women and money are sobering. According to the National Center for Women and Retirement
Research, 75% of women are widowed at the average age of 56 and 1 in 4 of these women end up broke within 2 months of being widowed.
At some point in their life, 90% of women will be solely responsible for their family finances. As of this year, women control the majority of all the privately held financial assets in the United States.
A survey taken by the Transamerica Center for Retirement Studies found that, “three out of four women admit that they do not know as much as they should about retirement investing, and half said they are not confident in their ability to retire comfortably.”
Michelle Shaman is a native Californian who has been personally involved in real estate and investing for more than 20 years. Michelle strives to empower women with the investment knowledge they need to be successful in securing their own future and the future of their families. Through her smart leveraging program, Michelle shows women how to take control of their own assets, allowing them to relax and enjoy their lives, focusing on what matters most to them.
Retirement by default is easy. It takes no effort; you simply place all of your trust in others to control your assets; others who have much less incentive than you do to
make sure your retirement funds are designed to meet your retirement goals. And you pay them a fee, whether you make money or not.
Utilizing well crafted investment methods that she shares with her clients, Michelle helps women to create a retirement by design, rather than by default.
Achieve your retirement dreams through smart leveraging and simple investments Invest on Auto Pilot
Women under Michelle’s tutelage learn about smart leveraging techniques and how to have clear and specific goals for their retirement. They learn how to devise a simple, easy to follow plan that they can comfortably execute. (more…)
18716 Sagewood Dr., Dallas
18716 Sagewood DR, Dallas
Category: Fix and Flip 
Market Value: $220,000 (Market rent: $1,700/month)
| PURCHASE COSTS: | |
| Purchase Price | ($160,000.00) |
| Inspection(s) | ($275.00) |
| Appraisal(s) | ($450.00) |
| Survey(s) | ($275.00) |
| Lender Fees/Costs | ($2,000.00) |
| Closing Costs | ($1,000.00) |
| Other | $0.00 |
| Total: | -$164,000.00 |
| REHAB COSTS: | |
| Labor (from page 2) | ($16,000.00) |
| Materials (from page 2) | $0.00 |
| Total: | -$16,000.00 |
| HOLDING COSTS: | |
| Mortgage Payments | ($2,300.00) |
| Property Taxes | ($1,100.00) |
| Insurance | ($300.00) |
| Utilities | ($500.00) |
| Lawn Care | ($150.00) |
| Other | $0.00 |
| Total: | -$4,350.00 |
| SELLING COSTS: | |
| Selling Price | $220,000.00 |
| Commission To Agents | ($13,200.00) |
| Buyer Home Warranty | ($350.00) |
| Buyer Termite Letter | $0.00 |
| Buyer’s Closing Costs | ($2,200.00) |
| Seller’s Closing Costs | ($500.00) |
| Total: | $203,750.00 |
| PROFIT: | $19,400.00 |
2512 Lawndale, Plano (Dallas) – Fix and Flip
2512 Lawndale, Plano Analysis Report
Category: Fix and Flip
| PURCHASE COSTS: | |
| Purchase Price | ($129,900.00) |
| Inspection(s) | ($275.00) |
| Appraisal(s) | ($450.00) |
| Survey(s) | ($275.00) |
| Lender Fees/Costs | ($2,000.00) |
| Closing Costs | ($1,000.00) |
| Other | $0.00 |
| Total: | -$133,900.00 |
| REHAB COSTS: | |
| Labor (from page 2) | ($20,000.00) |
| Materials (from page 2) | $0.00 |
| Total: | -$20,000.00 |
| HOLDING COSTS: | |
| Mortgage Payments | ($2,000.00) |
| Property Taxes | ($1,000.00) |
| Insurance | ($300.00) |
| Utilities | ($500.00) |
| Lawn Care | ($150.00) |
| Other | $0.00 |
| Total: | -$3,950.00 |
| SELLING COSTS: | |
| Selling Price | $180,000.00 |
| Commission To Agents | ($10,800.00) |
| Buyer Home Warranty | ($350.00) |
| Buyer Termite Letter | $0.00 |
| Buyer’s Closing Costs | ($1,800.00) |
| Seller’s Closing Costs | ($500.00) |
| Total: | $166,550.00 |
| PROFIT: | $8,700.00 |
Anchor, Plano, TX Flip (Dallas)
Anchor, Plano, TX – Analysis
Category: Fix and Flip Property
Bedrooms: 4 | Bathrooms: 2 | Sqft: 2,209 | Type: Single Family | Built: 1986
| Estimated Project Duration | 3 Months |
| PURCHASE COSTS: | |
| Purchase Price | ($153,000.00) |
| Inspection(s) | ($275.00) |
| Appraisal(s) | ($450.00) |
| Survey(s) | ($275.00) |
| Lender Fees/Costs | ($2,000.00) |
| Closing Costs | ($1,000.00) |
| Other | $0.00 |
| Total: | -$157,000.00 |
| REHAB COSTS: | |
| Estimated Labor & Materials | ($15,000.00) |
| Total: | -$15,000.00 |
| HOLDING COSTS: | |
| Mortgage Payments | ($2,000.00) |
| Property Taxes | ($1,000.00) |
| Insurance | ($300.00) |
| Utilities | ($500.00) |
| Lawn Care | ($150.00) |
| Other | ($100.00) |
| Total: | -$4,050.00 |
| SELLING COSTS: | |
| Selling Price | $200,000.00 |
| Commission To Agents | ($12,000.00) |
| Buyer Home Warranty | ($500.00) |
| Buyer Termite Letter | $0.00 |
| Buyer’s Closing Costs | ($2,000.00) |
| Seller’s Closing Costs | ($500.00) |
| Total: | $185,000.00 |
| PROFIT: | $8,950.00 |
1622 Live Oak Lane Allen Tx (Dallas)
Property Report : 1622 Live Oak Lane Allen Tx
Category: Rental Property
Price: $136,300 Rent: $1650/month
Disclaimer
This tool is provided “As Is”. All information is believed to be accurate, but not guaranteed. It is intended for the purpose of illustrative projections. The information provided is not intended to replace or substitute any legal, accounting, investment, real estate, tax or other professional advice, consultation or service. The author of this tool is not responsible nor liable for any damages arising from the use of the tool.
Executive Summary
Property Description
| Name | 1622 Live Oak Lane Allen Tx |
| Address | 1622 Live Oak Lane, Allen |
| Type | Singlefamily |
| Size | 2677 SF |
| Rooms | 4 bed. + 3 bath. |
| Purchase Price | $ 136,300 |
| Rent | $ 1,650/month |
Financing Overview
| Purchase Price | $ 136,300 |
| Down Payment | $ 27,260 |
| Mortgage (30yr @ 5.50%) | $ 109,040 |
| Loan-to-Value (LTV) | 80.00 % |
| Closing Costs | $ 2,000 |
| Total Aquisition Cost | $ 140,300 |
Income, Expenses and Cash Flow (Year 1)
| Gross Operating Income (GOI) | $ 18,810 |
| Total Expenses | $ 6,948 |
| Net Operating Income (NOI) | $ 11,862 |
| Annual Debt Service | $ 7,429 |
| Rehabilitaion | $ 2,000 |
| Cash Flow Before Taxes (CFBT) | $ 2,433 |
| Income Tax Liability | $ 0 |
| Cash Flow After Taxes (CFAT) | $ 2,433 |
Financial Analysis
Holding period of 15 years and discount rate of 10% were used for calculation of NPV and IRR. The rest of the financial measures are for the 1st year only and therefore doesn’t provide such exact information.
| Net Present Value (NPV) | $ 90,484 |
| Internal Rate of Return (IRR) | 17.72 % |
| Cash on Cash Return | 14.18 % |
| Return on Equity (ROE) | 7.78 % |
| Capitalization Rate | 8.70 % |
| Gross Rent Multiplier (GRM) | 6.88 |
| Debt-coverage Ratio (DCR) | 2.67 |
| Operating Expense Ratio (OER) | 36.94 % |
Resale Analysis
| Sale Price in year 15 (Appreciation:1%) | $ 174,145 |
| Sale Proceeds (Before Tax) | $ 86,184 |
| Optimal Holding Period (based on NPV) | 30 year |
Property Description
| Price | $ 136,300 |
| Address | 1622 Live Oak Lane, Allen, 75002, TX |
| Country | US |
| Year Built | 1992 |
| Type | Singlefamily |
| Size | 2677 SF |
| Number of Bedrooms | 4 |
| Number of Bathrooms | 3 |
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Welcome , today is Wednesday, February 22, 2012