How to Start a Home - Based Real Estate Business

A wealth-building practical guide to starting your career as a Real Estate Investor TIME TESTED STRATEGY TO BUY, CLOSE, RENOVATE, SELL & RENT FOR SIGNIFICANT PROFIT & WEALTH BUILDING BOBBY BLAIR REAL ESTATE AUTHOR, INVESTOR AND ENTREPENEUR

• In 1993, I was a 29 year old aspiring entrepreneur that had spent my entire youth and all my 20's playing junior, collegiate and professional tennis, then becoming a tennis coach in 1988. I was looking for a way to generate millions of dollars in revenue with a home based business. My dreams became reality when I was introduced to the father of one of my tennis students and then mentored by this amazing man, Jac Klamper. He taught me how to locate wholesale properties, finance distressed homes with private lenders, contract to purchase wholesale properties risk free, renovate homes affordably, rent or resell these renovated properties for incredible profits in Orlando, FL. If you follow my step by step strategies and time tested business m odel detailed in my book, your dreams can also become reality. I also have made available to my clients a thorough hands on education taught by myself and my team. Your sincere dedication combined with my personal wholesale real estate mentoring program and your hard work, your successful real estate career can become a reality. Join my team and I today by reaching out to me at [email protected]. • DREAMS DO COME TRUE! REAL ESTATE CONSULTING USA

• 25 year veteran in real estate • Involved in over 1,000 transacted homes, that were bought, fixed, and sold or bought, fixed, and rented • Former National Real Estate Investment Spokesperson for Success Magazine • Founder of the National “Turnkey” Investment Program FORWARD

First things first, this a business. If you want to be successful in any area of real estate, you must adapt your mindset to this fact. Your business will require time, commitment, dedication and hard work. You will need to invest in your business, with both time and money. There is no doubt that you can make money in real estate, but it is not a get rich quick scheme. You will need to learn about real estate, about running a business, about how to find and close deals, about contracts, about marketing. And that is why we are here. This guidebook will guide you through the nuts and bolts of building your real estate portfolio.

In this manual we will discuss basic business principles, how to set up and

build your real estate portfolio for a successful and rewarding retirement.

This workbook will provide you with a step-by step understanding of our 'Turnkey Wealth Building' strategies, proccesses and time-tested

executions that we implement on your behalf for you financial success.

Page 1 of 140 Sample Business Plan

Real Estate Wholesaling

1. Company Information

Your Company was formed in July 2016 in order to help distressed property owners in your area. We are a company that specializes in purchasing properties from motivated sellers in order to wholesale them to rehab investors and landlords. Your Company is owned and managed by you.

2. Management Information

Short Bio.

3. Company Objective and Purpose

Your Company purchases residential real estate in your area. Our focus is on single family homes that can be acquired and renovated at a cost of 65% or below of the current fair market value. Due to the seller’s circumstances. While our main objective is to make a profit, we are also aware of our responsibility to the communities we do business in, and our role in the betterment of these communities.

4. Company Summary

Your Company invests in residential real estate by purchasing distressed properties below 70% of fair market value. Our strategy is based solely on making sure the profit is made at the time of purchase and not on speculative appreciation months or years down the road. Our profit for the first year is expected to be low because we are in the early stages of the business cycle. As we gain more experience we expect our profits to increase. As we develop our business we will put in place a solid group of people with defined roles that will ensure our success such as Realtors, settlement attorneys, contractors, and bankers. As with any business we will continually evaluate each member’s role and contributions and make necessary changes

5. Strengths and Weaknesses

One of the strengths of Your Company is we are a small company which will allow us to run efficiently, enabling us to make quick and educated decisions. We are local to the area of our investment properties which gives us a distinct advantage in knowing the market and being able to locate profitable investment properties.

Our weakness is our lack of relationships with industry professionals, thus making initial deals more challenging. As we move forward and gain more experience these relationships will develop and become a strong source for referrals and contribute to our success. However, we’ve acknowledged our shortcomings, and will address them by outsourcing things such as book keeping to qualified professionals.

Page 13 of 140 6. Goals

Over the course of the next year, our goals are to establish relationships with banks, realtors, accountants and other investors, and to build a marketing campaign that will lead to a steady flow of leads. In our first year we hope to wholesale two to three properties with the understanding that it will be a challenge until we build our relationships.

7. Start-up Summary

Your Company will receive initial funding from its principal in the form of capital contribution and short-term loans. The start-up expenses will be approximately $10,000. These expenses are related to legal services, marketing campaigns, office supplies and equipment, and working capital.

In the beginning our sole efforts will be focus on generating a steady flow of leads from prospective sellers. Out marketing plan which is outlined later in this plan will be implemented and measured for its effectives.

II. Market Analysis Summary

Your Company invests in distressed residential real estate. The main target areas will be those areas that are in high demand by first time home buyers in your area. They have stable resale values yet provide sufficient amount of opportunity. Once the target property is acquired it will be quickly resold to a rehabber or landlord for a $5,000 to $10,000 profit. The wholesale of a property take 30 to 90 days.

1. Market Segmentation

Your Company plans to wholesale most of its properties; however, as we progress and our profits allow it, we intend to begin rehabbing to sell for retail as well as holding select properties as rentals for the long-term investments. The cash flow generated from these holdings will be reinvested into the business and pay down the mortgages. With this strategy we believe we can sustain ourselves through real estate down cycles.

2. Market Strategy for Acquisitions

The properties targeted by our company are affordable single-family homes in predominately first time homebuyer neighborhoods.

Due to our limited marketing budget, we will focus our efforts in finding motivated sellers in a smaller, more local area at first. We will market to Notice of Defaults Pre-foreclosures (NODs), For sale by owners (FSBO), For Rent By Owners (FRBO), Expired Listings, Free and Clear, Center of influence, Probate, Divorces, Bankruptcy and vacant land in need of repair.

We will obtain these leads by searching public records for the county, as well as from our relationships that we’ve created through our networking amongst other Real Estate Investors and professionals. For networking with other investors we have joined a local real estate investors

Page 14 of 140 association and attend all their meetings. We have established relationships with investors, who obtain more leads, then voice their interest in buying and we pay them for the properties that we actually purchase. This will help us keep our marketing costs down in the early stages.

3. Market Strategy for Sales

We will market our homes to other investors who are looking to rehab the properties for resale or renting. To find these investors Your Company will do the following

· Offer the properties to investors on our buyers list that we have built up through networking.

· Advertise online at Homes.com, Harmonhomes.com, Homesandestates.com, Zillow.com, Trulia.com, Realtor.com, Googlebase.com, Exitrealty.com, Postlets.com

· Advertise in local news papers

· Present the property at our monthly Real Estate Investors Association meeting.

· Bandit sign out in front of the house

An added bonus to our marketing is that we will identify potential buyers for any future properties we wholesale. This will enable us to target areas/properties that we know our buyers are looking for.

4. Competitive Edge

Our Contracts get accepted even when they are lower than the competition because they have none of the contingencies that are typically associated with real estate contracts. In addition, we offer quick settlements, usually less than 30 days.

III. Implementation Plan

A. Marketing for Purchase

* Send out Mailers to our distressed home owners ever month * After receiving calls from potential sellers we will determine motivation over the phone by asking leading questions and listening to what they have to say. * If seller is motivated enough we will setup an appointment to look at the house and evaluate them. * Before appointment we will do our due diligence on the prospective property. * At meeting with home owner we will determine a repair estimate

As of right now you are responsible for marketing and purchasing properties. It is the goal of Your Company to follow up on all leads within 24-48 hours.

B. Pre-Purchase Duties

Page 15 of 140 Once we have the property under contract we immediately contact our settlement company to order the title work and schedule a settlement date. During this time we contact our lender and forward all of the necessary information to them so that a file can be opened and the financing process can begin. We will also start to market the property to our buyers list in order in order to find a buyer before we even settle with the seller. If we were to rehab this property this is where we would contact the contractors and set up a scheduled base on our closing date and also call the insurance company to obtain the appropriate insurance policies.

3. The Rehab Process

At current time we do not plan on rehabbing any properties, but it will be one of our backup exit strategies in case we are unable to wholesale to another investor. There will be a separate business plan for this situation.

4. Office Management

In the beginning, office tasks will be minimal, but as time goes on there will be many more tasks that will be begin to keep us in the office rather then in the field obtaining deals. Tasks such as filing, paying bills, collections, answering the phone, scheduling appointments, etc. When the appropriate time comes we will hire a capable book keeper who will work a few hours a week to free up our time. In addition to a book keeper, we foresee needing to hire an administrative assistant to take on many of the other office duties, answering phones, filing paper work and other office functions so we can deal with more profitable tasks. We will pay well for this position as it will be imperative for them to be competent and hard working.

IV. Sales Strategy

Main: Wholesale

Upon locating a property that meets our criteria, we will immediately market it to our buyers list in order for us to have an investor already to buy the property before we even close with our seller. We developed our buyers list by networking with rehab investors, landlords, other wholesalers and owner occupants looking for fixer-upper type homes. Having the buyer ahead of time will all but guarantee a profit because we will know what they are willing to offer and thus be able to determine what our price point needs to be. If we do not have a buyer from our buyers list lined up we will market the property by o Advertise online o Homes.com o backpage.com o craigslist.com o Zillow.com o Trulia.com o Realtor.com o Googlebase.com o Exitrealty.com o Oodles.com

Page 16 of 140 o Postlets.com o Advertise in local new papers o Local penny savers o Offer the property at our monthly Real Estate Investor’s Association meetings and on the REIA’s yahoo group message board o Place Bandit signs around the neighborhood

This advertising will also contribute to our buyers list for future wholesale deals. We, however, do understand we may come across a handful of properties we cannot wholesale to other investors. In such cases we have several exit strategies in place that will allow us to recoup our investment over time.

V. Sales Projection

In our first year we plan to complete 3-6 transactions, taking into consideration the learning curve involved in wholesaling and building up our network. We plan to profit $5,000 to $10,000 per deal in year one, while increasing that to $10,000 to $15,000 by year two. In year two we plan to wholesale 10 to 20 houses, netting us between $100,000 to $300,000 in profit. As we gain more experience we will look to increase the profit for each transaction instead of increasing the number of transactions done.

VI. Projected Profit and Loss

Your Company is a newly formed company that plan to purchase and wholesale 3 to 6 houses in year one with a net profit of $7,500 on average. In year two we plan to purchase and wholesale 10 to 20 properties with a net profit of $12,500 per deal.

VII. Financial Plan

We plan to use hard money and private lenders to gain access to cash quickly. It is very important to have access to cash for deals that require a quick close. For that reason, we keep a list of private money-lenders who can provide such funding on short notice. The acquired property will serve as collateral for the in loan. It is our desire to be able to obtain short term loans of up to $300,000, which would be sufficient to buy the property and quickly resell it to another investor. This process would take 30 to 120 days depending on circumstances.

IX. Important Assumptions

We assume that the real estate market will continue to slow and that interest rates will rise. This market leads to many distressed home owners who need to sell their properties.

X. Summary

It is our goal to establish a good name as soon as possible so that deals will come to us through other investors, individuals and realtors. Our expansion plans are realistic and achievable. We are confident that we have the right people on our team and the right process in place to achieve our goals

Page 17 of 140 SECTION 2 START SMALL, THINK BIG

Chances are that as you start your new real estate business it will be just you or maybe you and your partner, and probably part time. And while that may be the reality now, that is not the dream and vision for the future. As you begin your business, you want to lay the framework for growth. Remember, think professional!

Here are some things you may want to consider:

Digital and Electronic Presence We live in a digital world, and the digital presence helps a business grow.  E-mail accounts. You will eventually be using email in your contacts with both buyers and sellers, you don’t want to use your personal email. Does not look professional. Minimally set up a google account with [email protected]. All emails should be sent to company emails and remain company property.  Website. A website will provide you a place to post inventory and images of property you control. Remember that a key part of wholesaling is to turn properties quickly, you do not want to invest your cash in holding inventory. Having a website with properties listed gives your potential buyers the opportunity to look at your inventory at their convenience whether you are available or not. You do not want to lose the sale because you were unavailable to talk to the buyer. The other advantage of a website is that you can personalize your email to [email protected]. Now, that is impressive, and allows for future growth as you add more people to your team. You can easily build your own website using the

Page 18 of 140 website builder at GoDaddy.com (and they provide free email accounts) or WIX.COM.  Facebook, Twitter, Instagram, etc. Social networking is the fastest way to grow your business. Again, you do not want to use your personal accounts. Create pages and accounts with your business. Drive them to your website.

 Telephone. Availability is important, and so is professionalism. A phone is a business necessity, but you may not always be able to answer an incoming call. Is the voicemail greeting going to be your personal greeting or will you have a business greeting for personal calls that you receive? Will you need to buy and carry multiple phones? Again, technology comes to your rescue. There are services such as Ring Central which provide virtual phone systems. You can get a business number, set up a professional greeting message and

Page 19 of 140 even assign extensions. The great thing is that the calls get forwarded to your cellphone. This has many great advantages:

o Calls answered 24/7 with your personal professional greeting. o Calls forwarded to your cell phone and announced so you know it is a business call.

o Voicemails are sent by email to your email address and as text message to your phone.

o Allows for growth and control. All calls go to a business and seamlessly routed to a cell phone. If an employee leaves the business, you redirect that extension and do not lose control of your buyers and sellers.

Office Supplies Remember the motto for the Boy Scouts; “Always Be Prepared”. You never know when you might meet a prospective investor or a seller. You can be driving down the street and see a great property with huge potential. Opportunity knocks, be ready to open the door.

o Business Cards. Always have plenty to hand out, and make sure they look professional. It is a small investment which can bring a huge profit. I prefer to have a non-laminated card with no writing on the back. That way the person can use your card to make notes. And even if the note is not about your property, they will keep your card because of the note.

Page 20 of 140 o Stationery. Even though the majority of communication may be done electronically, a piece of paper can be a powerful reminder. Anything that has the name and contact information of your business is a great thing to put into the hands of your potential buyers and sellers. And never discount the impact of a thank-you note.

o Supplies. You should always have these in your workspace AND your vehicle.

o Pens o Paper / Notebook o Paperclips / Stapler o Tape o Magic Markers

Policies and Procedures – Have a Plan As you grow and add employees or partners, it is important to have an understanding of what is expected from you by your employees (what you will provide) and what is expected from them. You will also find it a good tool for you personally to develop a business mindset if you follow the rules that you establish, even if it is only you in the business. The manual should include the following.

Page 21 of 140 o A Code of Conduct. A code of conduct is a document for the employees of a business. The code protects the business and informs the employees of the company's expectations. It is ideal for even the smallest of companies to form a document containing important information on expectations for employees. The document does not need to be complex or have elaborate policies, but is a simple basis of what the company expects from each employee. The purpose of the code of conduct is to develop and maintain a standard of conduct that is acceptable to the company, its vendors, customers and other employees. It includes behavior guidelines that are consistent with company policies and reflect how the company perceives its image.

Create the code of conduct with language that is as clear as possible. Examples may include prohibitions on illegal activities, smoking, drinking, foul language, discrimination and harassment. You may also include confidentiality expectations, procedures for calling in sick, expected dress and appearance and reporting procedures for emergency situations. Make a list of conduct code subjects and statements and pare them down to an easily digestible short-list of the most important codes. Examples of codes of conduct can be found on the internet. o Dress Code. While reference may be made in the Code of Conduct about appropriate attire, it is a good idea to also have a separate dress code that gives guidelines for acceptable attire at business functions, social gatherings and appointments. The dress code should also address matters of personal appearance and hygiene. A “Dress for Success” attitude should always be adopted. Taking into consideration the “Be Prepared” motto, a recommendation of a change of clothes in your vehicle in the event you run across a great

Page 22 of 140 opportunity but may not be suitably dressed. Some personal grooming items should also always be kept in the vehicle.

o Attendance Policy. Establish a clear procedure and expectations for attendance. Work hours divided between office hours and in the field hours. Policies for calling out sick and requesting time off. o Office Procedures. Office procedures must be clear and comprehensive. All tasks not assigned to a particular person are tasks that potentially get left undone.

o Open / Close. First person in opens and turns on the lights, last person out closes and turns out the lights.

o Company Phone. Determine who is responsible for handling incoming calls during business hours. Set a policy for how incoming leads are assigned. Policy must be clear and fair.

o Office appearance. Set standards for appearance of work area. Assign responsibilities for shared office space.

o Supplies Inventory. Have a procedure for monitoring office supplies, use and reorder.

Page 23 of 140 o Chain of Command. Ensure that everyone knows and follows chain of command. Do not let sub employees bypass their supervisors for special favors or recognition. Support your managers and validate their authority. o Work Flow. Ensure that all tasks are clearly defined and that all know the proper procedures for submitting paperwork and requests. This should include how paperwork is to be completed and timelines. o Financial. If the business is successful, there will be money coming in and going out. . Have a systematic approach for requesting and tracking deposits and escrows. . Track and record all expenses; company and property related. . Who has the authority to issue and sign checks. . Track all revenues from sales. . Record commissions and set requirements and timelines for payout.  Commission rate  Requirements to receive commissions  When commissions are paid  Straight commission, salary and commission, draw against commissions.

Page 24 of 140 SECTION 3 WHOLESALING

Now that we have looked at some general business practices, let’s talk specifically about the business of wholesaling houses. It doesn’t just happen, you have to work at it, and often work hard at it. But, as with any business, once you get a good reputation, you will get bigger and faster results with less effort.

As a wholesaler, you are a middleman, a service provider. Your ultimate goal is to match properties with investors. Related goals are to find properties and to find investors. Wholesalers generally identify bargain properties, gain an equitable interest through a contract and transfer their equitable interest to another investor for a fee.

If you are to be a successful wholesaler, knowledge is key. You will have to continue to gain basic real estate knowledge (contracts, deeds, appraisals and inspections) and specific knowledge of areas and codes. You will need to learn the terminology of the business. You will need to learn about costs of repairs and how to spot warning signs in a home walkthrough. Once you have located a target property, you will need to know how to pull comps and tax records. Great deals don’t just happen, you create them with knowledge and skills.

Page 25 of 140 FINDING PROPERTIES Obviously, we want to buy the property at the lowest possible price. That is usually achieved when the seller is in a position that they need to sell as quickly as possible. When looking for a property, pay attention to words that indicate situations that cause the seller needs to sell quickly:

 Bankruptcy  Foreclosure  Divorce  Moving  Death  Repossession

Or signs that the seller wants to sell quickly:

 Desperate  Distressed Property  Make Offer  Great Opportunity  Must Sell  Investment  Price Reduced Property  Will Sacrifice  Needs Repair  Wholesale Property

If the owner is not in a need to sell, it will be more difficult to negotiate a “good deal” price. If the owner believes that the property has strong selling points, which will also affect their desire to sell. They will probably want close to market value, which lessens its investment value. Watch for words that may indicate amenities or added value:

 New Appliances  Cable Ready  Newly Carpeting  Ceiling Fans  New HVAC  Fireplaces  New Roof  Great Location  Recently  Large Rooms Remodeled

Page 26 of 140 While price is very important, it is not the only consideration when purchasing the property. As in the saying for restaurants, the three things you must consider are location, location, and location. You might be able to get a property dirt cheap, but if it is half a block away from the city dump, it may not be a good investment. You want to buy homes in locations where people would choose to live. You will want to consider crime rates, other neighborhood homes, utilities and other standard of living conditions. Look for things that would make the property attractive to potential renters: bus lines, close to stores, security.

Remember that you will be looking at properties in transitional neighborhoods, but you also want safe, sound and good investments. If the homeowner is in a must sell situation, gather as much information on the situation as you can. Ask them why they are moving. Most of the time the owners will disguise their reason for selling so as not to reveal their urgency. Of course, they are trying to prevent below market offers. If the reason they are moving has to do with the house or location itself, then that should raise a few red flags. It is critical that you do your entire due diligence before entering into the contract.

If you notice, many of the reasons for selling could be considered negative life experiences. A motivated seller is usually a distressed seller or a distressed property. When approaching a motivated buyer, sympathy and empathy are valuable skills in securing the deal. Ask questions and listen. There will probably be other wholesalers and investors looking at the property, and the seller may feel that people are trying to take advantage of their misfortune. But, by listening to their story and needs, you can show them how you can help them by putting their home under contract. If approached correctly, wholesaling can be a business of helping people.

Page 27 of 140 In today’s economy, pre-foreclosures represent the greatest potential for the real estate investor. So, how do you get these deals? Commitment, concentration and compassion. You will have to do your legwork. You will need to spend time searching public records. You will have to make an effort to make yourself available to assist those looking for a way out of their economic problems. You must be focused, deliberate, organized and motivated. BUT, you must also be compassionate! Remember these two points: (1) you will be dealing with people who are hurting, and (2) you are not the only one interested in their property. If you are cold, unsympathetic or ruthless, they will work with someone else who does care and shows them courtesy and respect. And don’t try to act compassionate, be compassionate. That does not mean that you cannot make a profit, after all, you are an investor. They know that. Just be fair. Remember, we are looking for an all-win situation.

Contacting these homeowners is an art and a skill. Even if they call you because of a sign or an ad, you will need to communicate your ability and willingness to provide them with an option for their situation. If they call, ensure that your message would encourage them to leave contact information. If you initiate the contact based on information gained from courthouse records searches, it is usually best to contact them by mail. Again, this in an art. The letter needs to be professional, yet personal. Let them know who you are, how you found out about their situation, and what you can do to help. Keep a log of your correspondence. If after a few weeks you have not received a reply, send another letter. As to the contents of the letter, put yourselves in their shoes. Imagine that you are the one who is behind in your mortgage payment and facing foreclosure. What would you want to hear or read? What tone would you like a letter to you to have? What information? What options? Now, remember that you are an investor and write the letter. To increase the probability of a response, you might include a stamped self-addressed envelope.

Page 28 of 140 Of course, the seller, no matter how motivated, is going to want to get the most money possible. And while we can be in the business of helping, it is a business. In order to make the property interesting to an investor, and for you to make a profit, you will need to set a selling price of 60% to 70% of fair market value. The fair market value is determined by comparable analysis of other homes in the area and renovations and repairs performed by the investor.

It is suggested that you do not offer a price on the first meeting. Find out about their situation and the history of the property. Use a motivated seller questionnaire to learn more about the seller’s situation and the condition of the property. Ask if you can do a quick walk through the property and take a few pictures. Let them know that you want to go and do some research so that you can offer them the best deal possible. Then make an appointment to offer a proposal.

Another way of obtaining properties is advertising that you buy houses. This is often done with bandit signs (essentially small variations of the common billboard) are placed in yards and predetermined, high-traffic areas. They are relatively simple in nature and don’t consist of much more than one or two sentences, preferably stating you buy houses for cash and a phone number. Most cities have ordinances governing the installation of signs on public property, hence the term, “bandit sign.” The idea is to illicit a response from a relatively large pool of potential sellers. Simplicity is the key here since motorists only have a brief moment to take in the information.

A lot of municipalities do not permit the use of bandit signs, as they are often in violation of city codes. You must always remember to check with local

Page 29 of 140 town officials regarding the regulations of sign placement. Many cities have found it easier to enforce responsible bandit sign practices than to adhere to strict, No-Sign policies. While the placement of a bandit sign is associated with an assumed degree of risk, it is not enough to mitigate its use. In fact, bandit sign campaigns have proven to be so effective that their reward greatly outweighs any potential fine. These signs have the ability to bring in a significant amount of leads and deals that trump any penalties enforced by local governments. Ultimately, the choice to use a bandit sign campaign is up to you.

Other effective methods are drive bys looking for “Sale By Owner” signs and homes listed with realtors. If you are interested in the home contact the realtor to see if the seller is a motivated seller. When driving around, look for properties that may look either abandoned or neglected. Contact the owners and see if they might be interested in selling. Post flyers in common areas such as laundromats and grocery stores. Simple signs with tear away phone numbers usually get a good response. While advertising in newspapers and local shopping publications might have some value, they do not always lead by themselves to property acquisition. However, posting ads on sites such as craigslist has proven effective.

Page 30 of 140 DETERMING VALUE AND MAKING AN OFFER

The number 1 rule in real estate investing is that you make your money on the purchase, not on the sale. It is important that your offer is fair to the seller, but also fair to the investor. For that reason, it is necessary that you do your homework before you make your offer. Since you will be buying distressed properties that are in need of repairs or updating, the Fair market Value (FMV) would be the value of the home after the repairs, not as it sits now. This is called the ARV (After Repair Value). The two areas that have the highest effect on the offer is the ARV and the cost of those repairs. If either is off, a good deal could quickly become a financial nightmare.

The most common way to determine the fair market value is through the use of comparables. This process looks for sales of similar properties in the area, their value and selling price. When doing comparables, it is necessary to make sure that you are not comparing apples to oranges, or your market value will not be accurate. When doing a comparables search, base that search on:

 Size (amount of square feet)  The number of bedrooms  The number of bathrooms  Type of construction  Lot size  Age  Area (comparables need to be as close to the property as possible)  Time frame (should be current data)  Amenities

By looking at what these properties have sold for, you can determine a rough range of the FMV.

Page 31 of 140 The best way to get an accurate value without actually paying for an appraisal is to have a Realtor pull the comparables or a "CMA" or Comparable Market Analysis" for you. This only takes a few minutes to do and the comparables used just might be the same ones an appraiser will use. Not all realtors will perform this service as it does take their time and resources. However, if you have developed a relationship with a realtor for both acquiring and selling properties, they might be willing to provide this service.

Another way to approximate the FMV is to look at the tax records. Each year the county will assess a value for the property on which taxes are to be paid. These assessments are public records, and can usually be found online at the county appraiser’s website. The information will offer a description of the property and its assed value. This is not the Fair Market Value. The Assessor’s Office does not actually inspect the properties each year, but rather estimates the value based on inflation or other factors. You will need to know the ratio that was used by the Assessor in determining the property assessment. Once you know what the ratio, you can approximate the Fair Market Value by a simple calculation. Divide 100 by the ratio used, and then multiply the assessed value by that number. For example:

 Assessed value: $95,000  Ratio used: 80%  Fair market value = (100/80) * $95,000 = $118,750

The next crucial information is the Cost of Repair (COR) estimate. When you do your walkthrough, use a repair estimate worksheet and make notes on the condition of the home. Pay attention to any signs of water damage (stains on wall or ceilings) or termite damage. Look at doors, windows, screens electrical switches, wall plates and plumbing. Does the home have Central Air or window units, and the condition of the system? Your

Page 32 of 140 spreadsheet should also have costs for items that may need to be replaced or repaired.

Once you have determined the ARV and the COR, you are able to calculate the offer price. Real Estate Investors are typically looking for 30% profit. Many investors will use a short term loan (known as a “Hard Money Loan” to purchase and renovate the property. These lenders typically loan at 70% ARV. As a Wholesaler you will also be looking for your fee (WF), usually $5,000 - $10,000. A good formula to use to determine your Offer Price (OP) is: OP=.7(ARV) – COR - WF. This formula will prevent you from overpaying for a property, provided that you did not overestimate the ARV or under estimate the COR.

These are the two main mistakes that many new wholesalers will make. Knowing how to accurately determine the property’s value, and how to apply economic and financing conditions to the value of local properties is the most important technical skill a new real estate investor can learn. The most common mistake made by new investors is underestimating the cost of repair. While there will always be the unforeseen, a track record of providing accurate COR numbers will encourage investors to buy your deals.

While education can teach you how to determine the numbers, it is experience that will develop the skills. As a new wholesaler, trying to build a business and a reputation, there is little room for error. That is why it is very important to have a Power Team and a coaching mentor. Initially your Power Team will consist of;

 a Realtor  a Title Company  a Renovation Contractor  your Coach/Mentor

Page 33 of 140 Unless you have access to the MLS, you will need the help of a realtor to provide comps. Building a working relationship with a realtor can also provide a good source of distressed properties. The renovation contractor is someone who has experience in knowing what needs to be repaired and how much it will cost. Initially you should expect to pay a fee for these services since you will not be purchasing the property or managing the renovations you cannot promise your team that they will get the sale or the job. Some investors will already have their own people, but you are definitely encouraged to recommend your team to the investor. Your coach/mentor will review your offer and deal package and offer you the input of their experience.

When your offer is accepted, you will want to put the property under contract. This is how you control the property and the deal. How you write the contract is critical as it is a legal document. You will want your coach/advisor to review with you, to ensure that you have covered yourself with the proper contingencies. As part of the contract is the down payment amount. This is usually referred to as “Earnest Money, and shows the seller that the offer is genuine. The money is typically paid to a title company which will hold the money in escrow.

Your goal, as a Wholesaler, is to not have to buy the property, but rather sale

(assign for a fee) the contract. If you do not have an out, and cannot find a buyer in the specified time frame, you would be legally obligated to purchase the property. In this situation the best case scenario is that you lose the earnest money, the potentially worst case is you own the property. The contract must also be appealing to the investor. If there are no contingency plans for the investor, they may not want the risk of the binding contract. By careful planning and deal structuring you can create a well thought out contract with clauses

and terms that ensure a smooth and risk-free transaction.

Page 34 of 140 As a Wholesaler, the most important contingency for you is the “assignment clause”. This allows you to transfer all of the rights and obligations of the contract to another person. For the contract, the buyer is “Your Company or Assigns”. This gives you the legal right to assign the contract to another buyer. You then prepare an assignment contract that your buyer (assignee) signs guaranteeing you your funds at closing. If you put down an earnest money deposit, you want to recover that when the assignment agreement is signed. You will need to show the assignee proof of funds being held by the title company. We suggest that you require twice the amount of the deposit you paid. If the Assignor closes on the property the extra deposit is subtracted from your agreed fee. If the assignor does not close and you forfeit the deposit, you are covered plus make money for your time and effort and lost potential of the sale. The normal sequence of events is:  You sign a contract with the seller gaining control of the property,  You find a cash buyer (they may be using a hard money loan) to purchase the property,  You and your buyer sign an assignment contract that transfers all the rights and obligations to the new buyer and guarantees you your fee,  At closing, the title company pays you your fee.

CONTINGENCY CLAUSES

In the event that you are not able to find an investor to whom you can assign the contract, you want to have in place some contingency clauses. A contingency clause defines a condition or action that must be met in order for a real estate contract to become binding. A contingency becomes part of a binding sales contract when both parties (i.e., the seller and the buyer) agree to the terms and sign the contract. Essentially, a contingency clause gives parties the right to back out of the contract under certain

Page 35 of 140 circumstances that must be negotiated between the buyer and seller. f the conditions of the contingency clause are not met, the contract becomes null and void, and one party (most often the buyer) can back out without legal consequences. Conversely, if the conditions are met, the contract is legally enforceable and a party would be in breach of contract if he or she decided to back out.

When a contract is assigned, the contingency clauses remain in effect, but the timeline is not altered. The time restrictions are from the date the contract is signed with the seller. If the contract gives a five day right of inspection and it takes you two days to find an investor, then that investor only has 3 days for the inspection for that contingency clause.

Most contingencies have a time frame within which they must be fulfilled. If either party does not use the contingency in the specified time limit, then the contingency is null and void. If you make the deal dependent on a 30 day inspection, but do not do the inspection within the 30 days, you cannot use a failed inspection report as a reason to void the original contract. Here are some of the basic types of contingency clauses: 1. Based on an appraisal; the contract has as a stipulation that the property will be appraised for a certain minimal amount. If the appraisal is less, then you can cancel the deal. Or, if both parties agree, the price can be adjusted. 2. Based on financing; A financial contingency will state a specified number of days that you have to obtain financing. You have until this date to terminate the contract (or request an extension that must be agreed to in writing by the seller); otherwise, you automatically waive the contingency and becomes obligated to purchase the property – even if a loan is not secured. 3. An inspection clause; this gives you the right to have the home inspected within a specified time period, such as 5-7 days. It

Page 36 of 140 protects you, because you can cancel the contract or negotiate repairs based on the findings of a professional home inspector. An inspector examines the property’s interior and exterior, including the condition of electrical, finish, plumbing, structural and ventilation elements. This also provides you protection if your COR was too low. You can specify a maximum dollar amount for necessary repairs. If the inspection indicates that repairs will cost more than this dollar amount (COR), you can elect to terminate the contract. 4. Attorney’s right to review; this clause gives you protection when putting the deal in writing. “Subject to a review by the attorneys of the buyer and the seller within three business days after the signing of this contract.”

Remember, a real estate contract is a legally enforceable agreement that defines the roles and obligations of each party in a real estate transaction, and the contingencies that are attached to it are made part of the contracts-. It is important to read and understand your contract, paying attention to all specified dates and deadlines. Because time is of the essence, one day (and one missed deadline) can have a negative - and costly - effect on your real estate transaction. You will want to have your coach/mentor review all contracts before they are signed.

Page 37 of 140 WRITING CONTRACTS

Remembering that your goal is not to purchase the property but rather to assign the contract, your contract has to be perfect. It is critical that you understand how to read and write a contract. In the beginning, you will want your coach/mentor to review all of your contracts. And while you may have a real estate agent write the contract, remember that you are the one who is signing it.

A contract or agreement is essentially the agreement of two or more individuals. Not all contracts or agreements need to be in writing. However, real estate contract must be written. A contract or offer is not legally binding upon the presentation of the contract, but instead when the other party accepts it in writing. Once the agreement is accepted in writing, both individuals are bound by the agreement to the terms and conditions of the contract. The person or entity that made the offer can withdraw the offer at any time prior to acceptance.

In the event the contract or agreement is accepted in writing, the document is the source for the handling of the sale of the property. The individual preparing the transfer of ownership will use the document as the guideline for transfer. The transfer agent may be a title company, banker or real estate attorney. The agreement will tell the transfer agent how to distribute funds, transfer the ownership title, what stays with the property, what goes, what to do with the outstanding mortgages and indicate the rights of the parties.

The basic information for property transfers is typically covered in standard contract templates available in the market place (i.e., purchase price, buyer and seller names, location, financing). However, many transactions require additional conditions and terms.

Page 38 of 140 Extra information, conditions and terms are agreed to by adding another sheet of paper to the contract called an addendum. Often in the original agreement, contract or offer, you will see a note on the contract "see addendum." The addendum can include a few agreements or many. In fact, it is not uncommon to see an original typed section crossed out (line through the text) and a note saying, "see addendum." This allows the contract flexibility so you can add clauses, terms and conditions to the document.

Often you will see the following on the addendum:

"Terms and condition: The terms and conditions of this Addendum prevail in the event of a conflict with the terms and conditions of the attached Agreement of Sale."

In other words, the Addendum takes precedence over the contract.

This allows individuals to essentially negate information contained in the original document, changing the conditions and terms. The addendum can be very powerful. A well-written addendum can give you an escape clause, better financing, more rights, less liability and more negotiation power.

Following are explanations of each section of a contract:

Seller: The seller's name would be indicated in this section. If more than one party holds the property title, both names should be included. For example, a husband and wife's names would be included as "John & Mary Smith" as Seller.

Buyer: The individual or entity buying the property would have their names here. You may want to include after your name "and/or assigns." This will allow you some additional rights of assignment of the agreement.

Page 39 of 140

Legal description: The legal description of the property is not the address; it is the legal description as recorded at the courthouse. Typically it looks like this "Lot 208, Plan 4539, City of ______."

Street address: The exact address of the property-street number, city, state, zip.

Personal Property: You can ask for any items that are in the property to be included in this section (i.e. stoves, refrigerators, washers, dryers, curtains, pool, patio furniture, etc.) This is negotiable and normally refers to unattached or detachable property.

Purchase Price: The purchase price of the property.

Escrow to be held: The funds you deposit as "earnest money". Often the buyer may hold the funds but you can insist on your accountant, a company or an individual to hold the funds. We recommend the title company or attorney who will be closing the transaction.

Amount: The exact amount of money you will deposit with the escrow agent. This amount is negotiable. $500-$1000 is a standard amount.

Promissory Note: If you need to come up with additional funds to secure the property, you may want to consider a promissory note as an alternative to putting more cash down. The note is an agreement that can be held by an escrow agent. This can be extremely helpful if all parties agree.

Assumption of If the mortgage is assumable the party to assume Mortgage: mortgage. Interest rate: List the interest rate of the mortgage to be assumed.

Principal & Include the actual amount of the monthly payment Interest: that includes the principal and interest payment. The homeowner should be able to provide this information from their mortgage payment stubs.

Page 40 of 140 Approximate The balance of the mortgage amount should be balance: listed in this section. The exact amount is not necessary because it will most likely change prior to closing, due to the homeowner making additional payments.

Money Mortgage: This is additional financing of the property and may be a third party, or even the seller, financing the property through a mortgage. Spell out the interest rate for the mortgage and the term - try to stay away from balloon payments, which call for a full lump sum payment.

Amount: The amount to be financed through purchase money mortgage.

Other: You do not have to just focus on cash instruments to purchase a property. A home can be purchased through trade of goods, services and other property. Include these other forms of payment in this section.

Balance at close: Any cash to be transferred to the seller should be specified here. Hopefully, if you have done your negotiation well this will be "none."

Total: The total should be the same as the purchase price. The Payment sections must add up to the purchase price.

Financing: If any of the payment is to be financed by a third party the specifics of the financing and details are spelled out in the following points. If the financing is not met within the time frame outlined, the contract in null and void.

Interest rate: Indicate the maximum interest rate that you would accept. "Prevailing" can be too open ended and could cause problems, be specific.

Years: The period of time (repayment period) that the note/mortgage will be held.

On or Before: Do not leave your offers open. Set a specific period of time that the offer is valid after which it is void. 24, 48 or 72 hours is not unreasonable. Typically,

Page 41 of 140 you would write "on or before January 1, 2002 at 3:00p.m." Create a sense of urgency if you can, but realize you can always extend the offer.

Closing day, month Specify the closing date. Typically it takes 60 to 90 & year: days to close on a property. Depending on what you want to do with the property, it may be shorter or longer. This date can also be expressed as "on or before".

Restrictions, If there are any restrictions on the property they Easements, would be identified in this section as "other." In Limitations: very few cases are there restrictions but they do happen occasionally. The purpose of the property if often "residential."

Text: The balance of the contract/agreement is a template of standard clauses and terms to protect the Buyer. Go through the contract and become familiar with the terminology and specific clauses. This sample contract definitely favors the buyer. If you use a Seller's contract realize that the contract may be structured to protect the seller, not you the buyer. Review contracts in detail. When it is time to sell the property you may want to use a different contract, specifically one that favors the seller.

Acquiring This section specifies the exact nature of the use Approvals: for the property. It is usually residential but could be rental or some other objective. It also provides another measure of security to ensure you can get out of the contract if conditions are not met.

Special Clauses: This section is where you may have added additional clauses to the contract. Most of the time you will find "Subject to addendum" or "See addendum."

Witness and The buyers' and sellers' signatures must be Execution: included to approve the agreement. If there is more than one owner, get both signatures. Also, the signature of the escrow agent for the deposit needs to be included (this could be the seller or whomever receives the escrow deposit.)

Page 42 of 140

Brokerage Fee: A detailed breakdown and obligation of the brokerage fees to be paid to a broker can be part of the contract (if you are using a broker). Include this paragraph if appropriate.

Addendum: This is your opportunity to add as many clauses to the contract as you would like. Spell out the specifics of the negotiation and agreement in the addendum. Ensure you have escape clauses in case you cannot purchase the property or cannot find another buyer in time. Ask for more concessions.

Examples on the addendum:

 Closing costs to be paid per standard contract.  Contract contingent upon "5 day inspection period".  Property to be purchased "As Is", with no warranties from seller.  Seller to pay $1,000 in collections.

Risk-Free Contract Clauses

To ensure a risk free contract, include the following clauses:

 Subject to financial partner's approval (gives you an out).  And/or assigns (after your name on all contracts to allow you to transfer an agreement).  Subject to inspection prior to closing (check all properties).  Deposit five days after acceptance of contract or alternatives.  Subject to mortgages.  Subject to liens being cleared.  Subject to seller Purchase Money Mortgage (PMM) or Owner Take Back (OTB) and fully assumable to the next buyer.  Non-recourse (in case sellers take back mortgage.)

Sample Clauses

 The deposit check placed with this offer may not be deposited or cashed until all contingencies of this contract have been met to the satisfaction of buyer and buyer's associate.  This contract is subject to the approval of the buyer's associate,______(within _ days). The approval must be in writing and attached to this agreement.

Page 43 of 140  This contract is subject to inspection of the property by the buyer's associate, (within ___ days). The approval must be in writing and attached to this agreement.  This contract is contingent on buyer or assigns assuming the existing mortgage in favor of all notes or deeds of trust executed by the buyer shall be non-recourse.  Subject to inspection of property by buyer and written acceptance of condition of property within __days.  Subject to inspection and acceptance by a qualified person.  Seller to pay one-half of buyer's closing costs.  Seller to pay recording fees.  Seller to shampoo carpets.  Subject to a satisfactory roof, plumbing and electrical inspection to be done within ___ days after the date of this contract. Inspection to be paid for by the seller.  Possession before settlement: "Buyer to receive key to property and right to enter for purposes of physical improvements to property and to show the property to prospective occupants."  Cash credit to buyer for fix-up work: "Buyer to receive credit at settlement towards down payment for $ for painting, carpeting and general improvements to be made to the property."

Contract Presentation Checklist  Check contract for accuracy at least twice  Check addendum for accuracy at least twice  Sign both documents  Make copies as required  Make presentation to seller  Reinforce your position as a real estate investor who closes quickly, and pays all closing costs  Have all sellers sign agreement and addendum

A good deal and a great contract make for a happy investor. And a happy investor makes for a successful business!

Page 44 of 140 SECTION FOUR HOW TO RENOVATE AFFORDABLY AND PROFITABLY

Now that you have found and secured your investment property, it is time

to maximize your investment return. While you will have a good head-start with the COR you prepared when you made the decision to purchase your investment property, there is a lot of work to be done in this area. A good renovation will maximize your profits, while a poorly done, or overdone, renovation can result in a loss. The right focus, the right team and planning can make all the difference.

There are many different types of renovations for different motivations, but

the initial purchase of a flip house’ relies on the same basic factors: cost, timing and features. The first rule of investment renovations is to never underestimate the cost. Even experienced developers and renovators struggle with the initial projection, which includes not only the real estate and material costs but also negotiations, taxes, contractors and regulations. Before purchasing any property, you need to be sure there is some margin to cover unforeseen expenses.

When initially purchasing a property for basic renovation, you’ll need to look

for what the property doesn’t have rather than what it does, and the flaws in its basic functionality. A leaking roof, cracks in the walls, poor plumbing and ventilation systems, and broken gutters are the elements that will considerably lower the value of a property, and the elements that you’ll be looking to restore in a basic renovation. It's the

Page 45 of 140 no-frills, common-sense inclusions that buyers expect when they’re looking to purchase a house, and restoring those basic features will raise the property to the general standard of living offered by the rest of the properties in the area, and raise the resell value.

Cosmetic renovation is a quick type of flipping that is the best starting point

for those who haven’t renovated before. As its name suggests, it’s all about making the property more visually appealing to potential buyers. The most important factor in a cosmetic renovation is that all vital systems such as plumbing and electricity must be completely functional. Curb appeal, or the external visual appeal of the property as viewed from the street, is a focus area of a cosmetic renovation. While it won’t make a substantial difference in monetary value, a fresh coat of paint and designed landscaping will attract potential buyers and help the property sell faster.

Time is an important factor; you want to fix and sell the property as quickly

as you can so that you’ll be selling it within a similar economic environment and real estate market. Time is money, and ideally you’d want to flip the property in under six weeks before reselling.

Trust is vital when it comes to selecting the people you want to work with on

your investment renovation. Trade work can be fickle, and tradesmen vary in quality, punctuality and sincerity as much as they do in the prices they charge. You can’t be around to supervise 24/7, and you need to be able to trust your team with your investment; you need to trust them not to rip you off, and you need to trust them not to waste time. It’s therefore important to be selective when choosing whom to employ. You want someone who is skilled at their craft, respectable and likeable.

Page 46 of 140 FINDING INVESTORS

One of the best ways to get your feet wet if you are a beginning investor or wholesaler is to get out and start networking with other like-minded individuals in your market. The best ways and places to accomplish this is to join Real Estate Investment Clubs (REI). A quick search on Google will provide information for clubs in your area:

Real Estate Investors Club of Los Angeles 1601 N. Sepulveda Blvd., Manhattan Beach, 90266 (310) 792-6404

LA South Rea Estate Investors Association [email protected] Lisa Hoegler (424) 257-8172

Prosperity Through Real Estate www.prosperitythroughrealestate.com President: Steve & Robyn Love (818)6789-6269

Real Estate Investment Clubs are groups that meet locally and allow investors and other professionals to network and learn. As part of your continuing education and training and development of skills, you should start attending meetings as soon as possible and as often as you can. They can provide extremely useful information for both the novice and expert real estate investor. A top real estate club can provide a great forum to network, learn about reputable contractors, brokers, realtors, lawyers, accountants, and other professionals. These clubs will typically have speakers or other presenters who provide educational information on various subjects. These clubs are usually comprised of people from all aspects of real estate (from professionals to investors to homeowners) who are looking to both

Page 55 of 140 network and learn. Most of these groups have time before or after the formal meeting for networking; this is probably the most important part of the meeting, so be sure to get there and bring your business cards!

In a real estate investment club members come together to:

 network

 gain knowledge about investment practices

 get hot tips about available commercial or rental properties

 become familiar with laws and regulations

 understand market trends and how to profit from them

 trade information about vendors for property improvements and services

 get the advice of legal and financial professionals

 learn from guest speakers

 find a supportive group of like-minded individuals with common goals

At these meetings, you may find many investors who are looking for properties. If you have a property to market, be sure you bring several copies of a deal packet. If you have not yet secured a property, meet with investors and try to determine the types of properties they want and in what areas. You can become a fulfillment partner to an investor who wants town but does not have the time or skill to find properties. Having a willing buyer before you find a property can be a great advantage.

But just being willing is not enough. You will need to gather some background information.

Page 56 of 140  Are they a qualified buyer, do they have cash or financing at hand  Do they have IRS’s or 401k’s that they can use to purchase properties  Do they already own property  What type of property are they looking for  Are they interested in a specific geographical area  What is their budget  How many properties are they wanting to acquire  Are they looking to buy-hold-sale (flip) or are they looking for rental property to own  Do they have someone who can do the renovation work Once you have qualified your buyer present them with deals that match their needs.

Another good way to find investors through the use of bandit signs. Advertise a property you have and give some basic info.

List properties on websites like Craigslist, using phrases like Handyman special or great income property.

Page 57 of 140 Even after you have assigned a property, continue to take calls and build your list of investors. Gather their contact info and then send them your investor questionnaire. Then when you have a deal package ready, you can email o your investor database.

Be creative. Talk to family, friends and co-workers. Post signs at hardware stores. We have had success by having a booth at local flea markets. Host seminars at restaurants. Make good use of social media. The more contact you have with people, the more potential investors you will have. Contacting another investor’s bandit sign will not only allow you to establish relationships with other investors in the area, but it will permit you to build up a large list of potential buyers. Take their name, number, fax, and email, and put that information in a database to reference later.

When you work with investors, give them timely and accurate reports. If you approach wholesaling as a business and remain professional in your presentation, you will build a strong foundation. A successful business thrives on its reputation. The best source of leads is always from referrals. If you provide outstanding service to your investor, they will tell their investor network about you. Before you know it, you will need to expand your business.

Page 58 of 140 ASSIGNMENT

1. The parties to this assignment are: Assignor: ______Assignee: ______

2. The following property and/or right(s) to the property is/are the subject to this Assignment: Property Address Parcel #: ______/ LEGAL DESCRIPTION: ______City, State, Zip: ______

3. Assignor, Assigns and Transfers the foregoing property and/or right(s) to the property, and Assignee accepts the same and gives the following as consideration to the Assignor. $ ______

4. The Assignee pays the Assignor $______, an amount two times the earnest amount the Assignor has in escrow. If Assignee closes on the property, the difference of the amount received and the escrow deposit is deducted from the assignment fee. If the assignee fails to close, the fee is forfeited.

5. The Assignor acknowledges receipt of the foregoing consideration from the Assignee and accepts the adequacy and sufficiency thereof.

6. The Assignor represents states and warrants the following with respect to title or legal right the Assignor has to the property and/or right(s) to the property that is/are the subject of this Assignment: This Assignment is completed on this ______day of ______, 201__.

______Signature Assignor Signature Assignee

______By: (Print) Assignee Signature of Assignee

______Witness: By: (Print) Signature of Witness

Page 133 of 140 How Real Estate Consulting USA is going to help you to build wealth in some of the best, time-tested real estate investment markets in the country with our proven “TURNKEY” management program

•Wholesale Acquisition Opportunities •Private Lending Sources •Renovation Crews •Property Management/Rental Teams •Retail Sales Teams •Asset Protection/Entity Creation •Tax Team •Mentoring Program DUE DILIGENCE PACKAGE…

PICTURES & VIDEO RENOVATION ESTIMATE RETAIL & RENTAL COMPARABLES PRIVATE LENDING OPTIONS TAX ROLLS GOOGLE MAP PROFIT ANALYSIS SPREADSHEET As the largest city in the state of Maryland, the Charm city has been dubbed the ‘city of neighborhoods’ due to the hundreds of identifiable districts. It was established by the Constitution of Maryland and is not part of any county, thus making it the largest independent city in the nation. It is the 21st largest city in the nation and it’s metropolitan area has a population of just over 2.7 million. Baltimore is the 2nd largest seaport in the Mid-Atlantic. RealtyTrac’s Q1 2016 U.S. Home Flipping Report reveals home flipping increased 20 percent from the previous quarter, up three percent from a year ago. The report shows that 6.6 percent of all single-family home and condo sales (43,740) were flips during the first quarter of 2016.

Last year saw housing flipping increase 75 percent as 179,778 single family homes and condos were flipped in 2015, accounting for 5.5 percent of sales last year. It marked the first increase in the share of homes flipped for the past four year.

Nationally, house flipping isn’t far above its historic norm, and the majority of home flippers today are using cash to purchase properties. The first quarter of 2016 saw 71 percent of house flippers use cash, compared to just 37 percent at the height of the housing boom. According to Blomquist, most markets appear to be behaving rationally and responsibly.

“Spending their own money rather than other people’s money is keeping flippers conservative.”

Home flipping increased seven percent (new all-time highs in Q1 2016) in nine of the 126 metropolitan statistical areas surveyed, which include Baltimore, Maryland; Buffalo, New York; Huntsville, Alabama; New Orleans, Louisiana and York-Hanover, Pennsylvania BALTIMORE POWER TEAM…

. Wholesale Acquisition Team . Private Lender . Renovation Teams . Property Manager/Rental Team . Retail Sales Team . Assigned Project Manager

Data Input

Purchase Price $ 88,500.00 Closing Cost - 3% $ 2,655.00 Contract Price: $ 73,500.00 Renovation Expenses $ 45,000.00 Assignment Fee: $ 15,000.00 Cash at Closing $ 139,155.00 Purchase Price: $ 88,500.00 Closing Cost - 3% $ 2,655.00 Approximate After Repair Value $ 200,000.00 Renovation Expense: $ 45,000.00 Total Investor Investment $ 139,155.00 Taxes 6 months: $ 1,500.00 Approximate Equity after Repairs $ 60,845.00 Insurance 6 months: $ 1,500.00 Approximate Equity Percentage after Repairs 30.4% R.E. Commission/ Closing Costs on Sale 9% $ 18,000.00 After Repair Retail Value: $ 200,000.00

ARV % Projected ROI Sale $ 42,845.00 $ 32,845.00 $ 22,845.00 Sale Price (Listed): $ 200,000.00 100.00% Projected ROI % 31% 24% 16% Sale Price (Accepted): $ 190,000.00 95.00% Projected ROI Sale w/Hard Money $ 31,573.45 $ 21,573.45 $ 11,573.45 Sale Price (Bail Out): $ 180,000.00 90.00% Projected ROI % w/ Hard Money 113% 77% 42%

Loan Amount=90% of Cash at Closing $ 125,239.50 Approx. Down Payment 10% $ 13,915.50 Origination Points= 4% of Loan Amount $ 5,009.58 Approx. Closing Costs $ 7,664.58 12 months @ 10% Annualized Interest Only Payment $ 12,523.95 Approx. Investor Cash to Close $ 21,580.08 6 months @ 10% Annualized Interest Only Payment $ 6,261.98 Total Investment = Cash to Close + 6 months payments $ 27,842.06 Origination Points + 6 months interest= $ 11,271.56

DISCLAIMER: Results shown are not typical for every investor. Investing in real estate can be risky. Always seek professional advice before you consider investing.

RECUSA - BUY/FIX/HOLD All Cash Deal Data Input Description Address Baltimore, MD 21212 Purchase Price ($ 77,900.00) Closing Cost ($ 5,453.00) Contract Price: ($ 62,900.00) Renovation Expenses ($ 10,350.00) Assingment Fee: ($ 15,000.00) Cash at Closing $93,703.00 Purchase Price: ($ 77,900.00) Closing Cost: ($ 5,453.00) 7% After repair approximate value ($ 122,000.00) Renovation Expense: ($ 10,350.00) Total Investor Investment ($ 93,703.00) 1.50% Approximate Equity after Repairs ($ 28,297.00) Approximate Equity Percentage after Repairs 23.2% After Repair Retail Value: ($ 122,000.00)

Monthly Rental Price (Listed): ($ 1,500.00) Rent Begins 3rd Month ( 2 month rehab - 1 month place tenant) Monthly Rental Price (Accepted):($ 1,350.00) Listed Acceptance Bail Out Monthly Rental Price (Bail Out): ($ 1,250.00) Rental Price per month ($ 1,500.00) ($ 1,350.00) ($ 1,250.00) Taxes ($ 70.00) ($ 70.00) ($ 70.00) Taxes Monthly): ($ 70.00) Insurace ($ 200.00) ($ 200.00) ($ 200.00) Property Management Fee (10%) ($ 150.00) ($ 135.00) ($ 125.00) Insurance: ($ 200.00) Misc. Repair and Vacancy Fee (10%) ($ 150.00) ($ 135.00) ($ 125.00) Monthly Net Revenue ($ 860.00) ($ 740.00) ($ 660.00) ARV % ($ 10,320.00) ($ 8,880.00) ($ 7,920.00) Sale Price (Listed): ($ 145,000.00) 100.00% 11.01% 9.48% 8.45% Sale Price (Accepted): ($ 140,000.00) 95.00% Sale Price (Bail Out): ($ 130,000.00) 90.00%

C&C= Commission @6% & Closing @ 2% DISCLAIMER: Results shown are not typical for every investor. Investing in real estate can be risky. Always seek professional advice before you consider investing. 2607 S. Elm Street Sanford, FL

Renovated pictures 2607 S. Elm Street Sanford, FL

Renovated pictures 2607 S. Elm Street Sanford, FL

• Purchase Price $62,900 • Purchase Date 09/14/2016 • Renovation Expense $10,350 • Property List Date 12/02/2016 • Sale Date 12/16/2016 • Sales Price $122,000

GROSS PROFIT $48,750 (-Expenses: closing costs, short-term finance costs, back-end real estate commission)

FLY & BUY TO BALTIMORE WEEKEND!

Friday, August 5, 2017, 7:00PM Meet & Greet Reception @ Host Hotel

Saturday, August 6, 2017, 9:00AM Tour Baltimore Investment Properties to Purchase, Meet and spend the day with our Baltimore Power Team of Service Providers

Sunday, August 7, 2017, 9:00AM- 12:00PM Tour Baltimore Investment Properties to Purchase. Write Contracts

PROPERTY RESERVATION FEE: $5,000 per property (to be applied to purchase price) PARTICIPANTS RESPONSIBLE FOR OWN TRAVEL AND ACCOMMODATIONS (Real Estate Consulting USA will provide suggested host hotel) SEE YOU IN BALTIMORE!