Real Estate Profit on Steroids

[MJ DeMarco]

This is Jackie Lange's EBook, Real Estate Profit on Steroids.

Mind you, I have not read it and this posting does not advocate this program or any others.

Enjoy and if you like, REP CashFlowDepot.

Real Estate Profits On Steroids

Cheers,
MJ

 

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[MrPink]

Hmmm.

"Step 3. Ask 2 secret questions to get the absolute cheapest purchase price."

"He asked our "magic question" and negotiated a "risk free" agreement to buy the property at a little less than 50% below the after repaired value. He gave the owner a $5 earnest money deposit."

---

Could you lower your price as much as possible?

---

Does anyone know the second one? hehe.

 

[biophase]

Does anyone know the second one? hehe.

Is that the best you can do?

 

[Chitown]

Jackie,

Thank you. It will be printed out this evening.

Rep++

Anthony

 

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[CashFlowDepot]

There is a lot of silent negotiating that goes on too. ( non verbal)

As you walk through the house point out defects you see by just pointing to them so the seller sees that you see it. find as many defects as possible and make sure they see that you see it. Each one reduces the price.

Pay attention to how I estimate repair costs in less than 10 minutes for more details.

Jackie

 

[hatterasguy]

Is that the best you can do?

My favorite is; can you do better? I know nit picky but I like that wording.

Or for my subs; I need this cheap I can't pay any money.

 

[CashFlowDepot]

What's even better is " I can pay your price but I need my terms" Then get zero down and low low payments.

You can then wrap the note when you sell so you r buyer does not need to get a hard money loan. You get money up front, money every month and money at the back end. NICE!

 

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[CashFlowDepot]

All these numbers are based on actual rehab costs in my area.

The experienced rehabbers in my area have learned that they need to buy houses wholesale but it makes NO SENSE to pay RETAIL for materials, they should be bought wholesale too.

When I do rehabs and when all the investors in my area do rehabs we buy materials wholesale and that reduces our costs.

Why buy materials at Home Depot or Lowe's when you can get the same NEW paint, new sheetrock, new faucets, new tubs, etc at surplus places for half as much.

All the newbie investors run to Home Depot for rehab materials - people who have been in the business a long time would never consider going there.

We also have many sources for cheap labor.

If you shop RETAIL for materials and use expensive contractors, you should adjust the numbers accordingly.

Also, I pointed out with rehab costs that it will not cost $1500 to paint the inside of a 1500 sf house but it WILL costs much more than $1500 to replace a air conditioner compressor. The numbers balance out.

The rehab estimator I use has been battle tested on more than 1,200 real estate deals and it works. It is based on a basic EL CHEAPO house.

If you are rehabbing a median price home or a high end home, you would increase the price for rehabbing because you would use better quality materials

 

[Bilgefisher]

Thank you for this Jackie. I look forward to reading it.
++

 

[hatterasguy]

Well you guys get stuff done cheaper down south to, you can get people to work for $10 an hour.

For example our trim guy costs us $225 a day, and thats cheap.
The total cost for electrical including every fixture down to the light bulbs was $6,100 on a new 2,300sf 4 bedroom colonial I just finished. It costs me roughly $63 a sf to build a new house.

You should put a note in the book that price varies depending on where you live, people on the coasts are going to pay a lot more.

Also I agree with you on the box stores, we only get miscellaneous stuff from them. Everything comes from wholesalers; lumber yard, plumbing supply etc. They not only have far nicer stuff, but its cheaper. For example Home Depot bathroom faucets suck, they use plastic drains which crack. Plumber supply house faucets, use metal drains and cost me $12 less each. I needed 5 in the last house I did so thats a savings of $60 right their.

 

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[CashFlowDepot]

You should NEVER EVER hire contractors by the hour. You should only hire them by the job and only pay after the job is complete. You;'ll get the work done cheaper and a whole lot faster when they know they don't get paid until the job is done. If you hire by the hour they will take their sweet time to drag that hourly rate on as long as possible.

I've got hundreds and hundreds of students in all over the US who are getting prices done at the same prices I quote in the book - this includes the East and West coast. They do not hire contractors out of the yellow pages but find the best contactors are the best prices and pay wholesale for materials. ( there's a trick for doing that too)

The book is to teach people how to be a wholesaler - not a rehabber. A wholesaler only needs an estimate of the rehab costs and the formula will get them there. the buy ( rehabber needs to be more detailed in their repair estimates and can use that knowledge to negotiate a better purchase price.

The things that holds many people back from starting as a wholesaler is knowledge about rehab costs and market values. The formula makes it easy to come up with a base line price for rehab costs for cheap houses. without the guide, some would never get started.

 

[hatterasguy]

If you have any good building supply wholesalers in CT, and contractors I would love to get their contact info. I have a feeling since we are about $20-$40 a sf below everyone else on new construction costs, in this area that our numbers are pretty good, but I'm always looking for deals. I'd especialy love to get a good deal on some builder's grade vinyl windows, off the top of my head I want to say I paid $120ish a pop for them on the last job.

But I don't wholesale, I build. To build you have to know exactly what stuff costs or your going to get screwed.

 

[hatterasguy]

Our competitors are $70-$100 a sf.


I can't take credit for it, I'm still building under my uncle. He has 30+ years of experiance and can get just about the cheapest price on anything. I'm still apprenticing under him.

Since he has done just about every job, from framing to site work, to tile work, he knows exactly what each job is worth. Beat the subs up to much and they never want to work with you again, give them some slack and they take you for a ride. Its a fine line.

Skilled labor where I live is fairly pricey, its still $25ish an hour, so things cost a bit.

A big variable in new construction that you need to take into account is site work. It can get VERY expensive very fast. If you have to blast, or run into other problems... My uncle does site work himself, he doesn't sub it out. On one hand it does help you hold your costs down, OTOH its not cheap or easy. One excavator can cost $200k+...

Last fall we did a sewer for my other uncle that went from a $12k to almost $30k job because we ran into the hardest rock you can imagin. Costs like this can throw a major dent into your budget. So when you make offers on the dirt you have to have a good idea what your costs are going to be before making an offer, or you will be screwed.

 

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[dbaker89]

For the contacts, did you ever google "<your town name>we buy houses" and using that as a resource to call in?

It seems that investors that are smart enough to rank themselves onto Google by the means of SEO, Sponsored Advertisement, or just having a website and being lucky probably are the ones that close quick, with cash.

Obviously go with your gut feelings, but is it a suitable way to find investors?

 

[hatterasguy]

Obviously go with your gut feelings, but is it a suitable way to find investors?

Maybe, but I know a lot of guys that don't advertise, or even have business cards.

The under the radar players can be pretty large to. I know a banker who had an average looking guy set up a meeting with him to get a "small line on a few properties". Said banker has been in the business a few decades and like everyone else you tend to know all the players in your area, since the RE world is pretty small. I wish I could have seen the look on his face, he was expecting to do a line on maybe 3-4 SFH's, but insted the guy wanted an 8 figure line on couple buildings he owns that had over 500 high end units. This guy had thousands of units, all paid for...Needless to say my banker friend loves him and their BFF's now! LOL!

It depends the kind of investing your doing, for a lot of people advertising doesn't do anything for them. Might even hurt them.

 

[dollarBlogger]

Jackie -

Just read through your eBook this past week. Fantastic info in there! Thanks for sharing!

Rep++

dB

 

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[SaraK]

If you want to be a better negotiator than 99% of the people out there, all you need to do is repeat that phrase as many times as possible during every negotiation, and strive to say as little as possible between the times you're repeating that phrase.

Seriously.

Good point. I've noticed in negotiations that if I am nervous I want to fill the silence, and if I do that then I'll lose for sure. It is hard to say very little, but that seems to be key.

Thanks for the line "is that the best you can do?", I'll have to remember that. It's great because it puts pressure on them to go to their lowest possible point, which you don't know but they do. I love it!

 

[Brootal]

Total noob question but: is selling options the same as wholesaling? From poking around in the different threads and looking on google, they look either the same or extremely similar

Please explain if I have it confused.

Thank you.

 

[CashFlowDepot]

An option is a contract to purchase with a contingency clause

when you wholesale, you get a contract with a contingency clause, then you can either (1) sell the contract, or (2) do a simultaneous close so the seller and the buyer never know how much profit you make.

 

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[Brootal]

Yes please clarify. These were the two things that I could not differentiate.

 

[CashFlowDepot]

If you sell your contract, you and the buyer fill out an assignment of contract which states how much you'll be paid to sell your contract to the buyer. the assignment is turned in to the title company and the assignment fee shows up on the HUD-1 as a line item.

the result is the sellers knows how much you made and that you sold the house immediately.

that's now a problem if you're just making $3k - $5k and you disclosed to the seller that you would be assigning your contract to someone else for a small profit.

But....

If you're making a lot of profit or if you really don't want the seller OR THE BUYER to know how much profit you are making on your wholesale flip then you should do a simultaneous close which means you have a contract with the seller and you have a separate contact with the buyer. YOu turn them both in to the title company and tell them you want to do a double closing or simultaneous close. The title company will usually close the buyer contract first and use their money to close the seller contract a few minutes later in a different room. The seller and buyer never meet each other and no one knows how much you make.

On a recent deal, I got a $185,000 house under contract for $60,000. I sold it to a rehabber for $90,000

If I did an assignment of contract for $30,000 the seller would be pissed that I made so much on their house. The buyer could be pissed that I made so much.

But because I got one contract for $60,000 from the buyer and a separate contract for $90,000 from the buyer and did a simultaneous close neither the seller or the buyer know how much I made on the deal.

BTW -- on this house, the buyer spent $40,000 on repairs and after holding costs made about $35,000 in profit.

Who came out ahead? My $30,000 wholesale flip fee that got paid in 7 days or the rehabber who made $35,000 after 4 months of rehabbing and loans, contractors, permits, etc...

See why you do NOT want to do an assignment of contract sometimes?

 

[CashFlowDepot]

You cannot be paid a commission or even call your flip fee a commission unless you are a licensed real estate agent.

If you refer to your fee as a commission it is the fastest way to get the real estate commission breathing down your neck and accusing you of pretending to be a real estate agent which carries fines and possibly the inability to do any real estate deals in your state.

There are hundreds of ways to wholesale real estate.

The purpose of Real Estate Profits on Steroids is to teach BEGINNERS how to get started so they can make money within 30 days with the least amount of risk and hassles possible. If you don't buy the house, you can avoid risk.

If you make things too complicated for beginners, many will never get started.

 

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[Brootal]

Cashflow and JScott- thank you for the clarifications.

 

[j0hn]

Hello all. Just downloaded the ebook and got up to lesson #2 but can't get go on until I assemble my contact list :smug2:. This book seems to have some great content but I am curious to know if anyone has any success with this system yet?

 

[CashFlowDepot]

I've got written testimonials from hundreds of students who have had great success. Many shared their HUD-1 and copies of checks with me to YES IT WORKS!

Just got a call two weeks ago from a guy who made $60,000 on his first wholesale flip in Tennessee

Another guy made $17,000 last week when he flipped a REO in Georgia

My daughter made $8500 on a deal last month.

That's why I give the book away to anyone who wants to learn how to get started. I know it can make a big difference in someone's life if they will just TAKE ACTION

 

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[tchandy]

Jackie,
Great idea laid out in your ebook. I'm halfway through but this gives me an idea that I can do to raise some money. Rep ++

Tom

 

[stlsmoore]

Taking action starting first thing tomorrow!

 

[Brootal]

Jackie,

I finished reading the book and I am ready to begin.

I have only a few concerns after finishing the read:

1) I live in a fairly small area (the closest thing to a small city is about and hour away) is it possible to still have great success in a relatively rurual area?

2) I am a bit confused on the transferring of the option to the actual investor. I assume at this point the investor will see how much you are going to make off of the deal. If the investor thinks for whatever reason you are asking too much money for your finders fee will this cause them to not buy from you in the future?

I have a few more questions, but will try to answer them myself as I go along through the process. I appreciate your response.

Thank you!

 

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[maximus20895]

So I went to Century 21 to talk about if I had everything in the agreements that the state of TN needs to be legal. Before I even mentioned that I told him that I was selling options..or going to be rather.

At once he asked if I had a real estate license or somesort of license. I said no and he said that it is illegal to get a fee/commision between real estate without a license.

Do I need one? Why or why not?

 

[maximus20895]

okay. So it's legal because I would have equitable stake in the propery once the seller signs the contract?

The guy told me that he wasn't positive and that I should talk to an attorney. I went there to make sure I would not get in any trouble legally. I want to pursue this further to make sure i'm doing everything right from a legal aspect.

Who should I talk to that would know this for sure?

I appreciate your detailed response. It really helped and made sense.