Business Plan?
I was hoping someone will have a suggestion as far as a real estate investing business plan. i have been involved in real estate for about a year and completed 1 rehab. i know i am making progress but i do not feel productive. i never felt like i had a plan of action. i just do some advertising, studying and try to figure it out as i go. if anyone has any recommendations it would be greatly appreciated.
Thanks-
5millionmore,
thanks for your post. i tend to want and do it all. wholesale, rehab, ect. but i am definitely going to focus on rehabs because i think it is good knowledge for all other areas. thanks again.
A plan is always good and it keeps you focused and on track towards your goal whatever it is. Here is a copy of my action plan. My wife says "give wife check" should be added at the end.
Set your goals high with your dreams, only big dreams motivate you to action and inspire others.
ACTION PLAN
(The Four “F’s”)
Finding: Using the following methods we will find suitable properties that provide a proper return on our investment dollars.
1. Word of Mouth, we tell everyone what we do.
2. Multiple Listing Service, we define parameters for searches and follow them every day.
3. Expired Listings, we contact “expired” listings that look like they may be profitable. We can buy them under the listing price due to no realtor fees etc.
4. Realtors, we train realtors in our parameters and get them to feed properties to us.
5. Notice of Default, we follow up on notice of defaults listed in the legal record by sending out letters, follow up letters and making personal contact with the ten most promising prospects each week.
6. Auction, searching out properties in the legal record we do primary due diligence and purchase them at auction at <75% of value.
7. Driving for Dollars, we drive through neighborhoods in transition and in our farm areas writing down addresses of properties that have been neglected, have FSBO and For Rent signs in the yard and follow up on them.
8. Fortune Maker Mailings, every 3 weeks we send out a mailing via Fortune Maker to out of area owners with follow up letters.
9. Reading the Obits we contact families that may be interested in settling the estate.
10. Courts, divorce, probate, tax, bankruptcy, code, by contacting the parties involved looking for motivated sellers.
11. Attorneys
12. Hair Dressers
All investments should have a projected net gain of $20,000 minimum per rehab project unless specifically detailed otherwise.
Finance: We seek out private investor money to finance our projects as our first resort. Paying 12% interest fee simple we provide and attractive incentive to investors to carry short term loans generally less than 180 days. This allows us to use our cash to make the repairs and market the property.
All mailings except NOD’s include one line about investment opportunities available to the seller with our company.
We advertise in major newspapers and on the internet to attract investors.
Purchasing mailing lists we identify people with 401K money that can be directed to a self directed trust through Equity Trust Company. We then sponsor investor luncheons were we explain the different possibilities open to them in a low key manner with zero pressure and let the product sell itself.
Fix: We maintain a current list of sub-contractors and handymen that are reliable and economically feasible. We capitalize on our Spanish language skills. This means contractors must be dependable and quality oriented above all, not necessarily the cheapest..
All projects have a detailed written estimate of work that will take place, the cost involved, and the scheduled date of completion. Every job will have a daily check or review of progress made by phone, personal appearance will occur at inception and completion of all projects prior to paying subcontractors.
Lien Waivers will be required by all subs upon payment for work completed. A contingency of 10% will be factored in for unseen problems should they arise.
As a last resort when it is expedient due to time or cash flow scarcity on a project we will do the work ourselves using hired helpers for the menial tasks.
Flip: Marketing will begin immediately upon procuring the property; a signs will be placed in the yard or on butcher paper in windows detailing work to be done and the price of the property upon completion. Handouts will be delivered within a 1-2 block radius within 72 hours of completion date. Handouts will include incentives to buyers such as Home Depot Certificates, travel vouchers, or payment of buyers closing costs.
Interested parties will not be allowed inside the house until the work is completed, we will take down their name and phone number for a “private showing” on a first come first serve basis. An open house may be scheduled upon completion.
Newspaper advertising will occur for 2 weeks on properties prior to listing on the MLS unless other venues are being used.
Property will be listed on the Wasatch Front Regional Multiple Listing Service, 2.5-3% commissions will be paid to buyers’ agents unless other increased incentives are in place during the first 30 days.
Two exit strategies will be in place for every property, no exceptions!
stockpro-wow! that is sweet. i will definitely print this out and review. one question though. who is fortune makers? are they a mailing company? i am looking for a way to do mass mailing. thanks again
stockpro99,
Wow that is some awesome stuff!!! thanks for the info again!
Very nice.
Do a search in this forum. This has been dsicussed a few times. If I recall correctly, the general feeling was that this is pretty much a scam or something to that effect.
Try this - http://www.thecreativeinvestor.com/modules.php?name=Reviews&rop=showcontent&id=46
[addsig]
Keep reading through the forums. NO YOU DO NOT NEED 20% DOWN. You need to learn other methods of investing. Learn about
Birddogging
Sandwhich Lease Options
Sub. to (AITD´s, Wraps, etc.)
Partners
Options
etc.
Thank you! Will do!!! Thanks again!
And also find yourself a halfway decent broker, any broker worth his salt should be able to get you more than 80% financing. There are some special situations that may make you have to look hard but they are out there.
[addsig]
I purchase a duplex a couple years ago using conventional financing with a 100% loan...
I just closed on another duplex using conventional financing with 10% down.
I was able to do these conventionally because they made sense. You can do deals with little of your own money, even when you are using conventional money. Not to mention the countless creative ways to acquire properties with little or no money...
Good Luck!
[addsig]
Thanks guys! That clears alot up for me. Sometimes its sooo confusing with the many different ways to do things. This board helps out a great deal. Thanks Again!!!
yes, the only things that require 20% down is Fannie/Freddie conforming type of stuff. Any knowledgeable broker should know that there ARE other programs out there. For example, I lend on $0 down of lower of appraised value/sales price. If they did some research, they would find this program too!
8-)
Most lenders / brokers only know how to do "A" paper loans. So unless your working with someone who knows investor products your out of luck.
With good credit, income ect. 0 down on investment properties is possible.
So work with someone who knows the products that you need.
on the "owner occupy" front does ne1 know the rule of thumb on that clause? do I have to "occupy" one unit for 1 month before I rent it out or can I "sublet" it to someone right away?
This may sound like a statement of the obvious but worth saying.
Any broker can get you 100% deals on Duplex - heck I even got them on 4-plexes. (I also have very good credit)
Make sure you run the numbers carefully. 100% deals narrow the scope of your purchases significanally and you will need to look harder for the diamond in the rough - assuming you are looking for positive cashflow.