San Diego property values are still among the highest in the nation. Wholesaling is good for San Diego Real Estate investors because although the property values are high, so if you wanted to rehab the place yourself it will take a good deal of funding. If you wholesale the deal, you will make a profit without tying up your capital long term and everyone ends up happy.

Here are 5 quick tips to get you started!

1. Have  a Real Estate Agent Find You an REO Property

• There are tons of REO properties on the market, and your real estate agent can help you find a good opportunity here.
• With the help of you real estate agent, REO’s are the easiest, fastest way to find a discounted property, especially here in San Diego.
• Banks are still willing to negotiate with you, especially with cash offer on the table.  Don’t be afraid to submit your offers.

2. Evaluate the Property Using Current Comps

• Your real estate agent can provide these for you.
• This is where you should ask the agent for an “as-is” value and an “after repair” value, so you can properly evaluate the deal, as well as market the wholesale if necessary.
• Physically visit and view the property for Step 3.

3. Estimate the Repair/Rehab Costs

• Use an estimate repair sheet to determine approximate costs.
• Add 5% padding to account for any unknowns while you’re evaluating the deal. It’s a much better idea to overestimate your costs and be happily surprised if your profit is higher than the other way around.
• Have a contractor meet you at the property if you need help determining the specifics for costs.

4. Analyze the Deal

• Use a deal analyzer spreadsheet to crunch the numbers. This takes the guess work out of the deal analysis and you can relax knowing that your numbers are correct, and that you didn’t miss some major math. Make sure you have a good one in place for accurate estimating.
  
• Determine your MAO (Max Allowable Offer)- This is according to rehab buyers criteria. The offer you make needs to make sense for you when you consider the as-is value, the potential rehab costs, the after-repair value, etc.
• Overestimate the numbers to make sure the deal has enough profit. Again, I can’t emphasize enough how important it is to make sure you are overestimating your costs so you aren’t caught short on a bad deal because you didn’t plan for the unexpected.

5. Submit An Offer

• Always submit an offer through your agent, even if you don’t think it will be accepted now. Make sure this offer is comfortable for you given the deal analysis and considering your max allowable offer.
• Supply a proof of funds letter from your lender or hard money agent to submit along with your offer.
• No today doesn’t mean no tomorrow. Oftentimes you may hear a “no” at first from a bank who might think they could get more for a property if they wait. If you keep your offer on file with them, they may consider it down the road.

Here are just a few tips to get you started wholesaling your first deal. Keep in mind that I recommend collaborating with other local real estate investors on your first few deals. “Learn while doing” with an experienced San Diego real estate investor is really the best way to get you on your way to success.

Good luck!

Robb Bailey from Red Trolley Homes made a complete walk through of a rental property trip he took to Memphis. Later he gave more details of the property he purchased, with a little help given by Marq Cobb from the Memphis Invest Office.

The first cash flow property Robb looked at in Memphis was bought by another investor and Robb ended up buying a different one, still with great cash flow and equity.

Details of the Scarlet Leaf Property in Memphis:

• Three bedrooms
• Two baths
• Double car garages
• Great Floor planning
• Good-looking fireplace
• Cash flows about $320/mo.
• Purchase price of $71,000, including all rehab work

The guys at Memphis Invest will do allthe work for Robb by adding new flooring, paint, fixtures, and kitchen upgrades. Memphis Invest also helps by looking for a potential renter, getting it rented and sends cash flow checks every month.

Marq summarized the detail of Robb’s first cash flow property in Memphis Tennessee, including the why this was the right investment property to buy. This all boils down to net cash flow, after PITI, management fees and any other expenses.

To get the numbers on this property, please leave a comment in the section below. Robb will email you an Excel spreadsheet with the details listed in the Property Information sheet seen in the video, complete with Cash-on-Cash return, total ROI, and full cash flow analysis.

]]> http://redtrolleyhomes.com/cash-flow-rentals/first-rental-property-in-memphis-tennessee/feed/ 0 http://redtrolleyhomes.com/financing/than-merrill-of-ae%e2%80%99s-hit-tv-show-%e2%80%98flip-that-house%e2%80%99-recommends-red-trolley-homes/ http://redtrolleyhomes.com/financing/than-merrill-of-ae%e2%80%99s-hit-tv-show-%e2%80%98flip-that-house%e2%80%99-recommends-red-trolley-homes/#comments Thu, 14 Oct 2010 12:55:03 +0000 Robb Bailey http://redtrolleyhomes.com/?p=644 Read More]]>

Than Merrill from A&E’s hit TV show “Flip This House” recommends Robb Bailey’s investing company “Red Trolley Homes”.

Interested real estate investors and first time home owners are on the hunt to find great properties with best market deal. If you are looking for great real estate deals that is under market value, Red Trolley Homes is the perfect place for you.

For potential home buyers and real estate investors, grab the chance to join Red Trolley Homes buyer’s list with these three easy steps:

• Go to buyers page at Red Trolley Homes
• Fill up the form
• Click submit; and
• A notification that you are one of the potential home buyers.

Hassle free and Robb will automatically notify you of hot properties and bargain properties with great deals within Southern California and most of all in greater San Diego area.

Hot properties go fast and you don’t want to miss out! Check out Red Trolley Homes hot properties, bargain properties at amazingly great market value.

Robb Bailey is a real estate investor  dedicated to running the RedTrolleyHomes company and aimed to focus a smooth relationships with his clients and partners. Keeping with the “quality over quantity” mindset, Robb and his team are always looking for quality professionals to network with, as well as new clients who are in need of immediate assistance selling their property.

For real estate investor and new home buyers who are willing to update themselves with new hot properties and bargain properties within San Diego area, Robb Bailey offers you his service in offering you bargain properties with great under market value.

Consider him as your underground source for bargain properties. Join Red Trolley Homes buyer’s list and you’re good to go.

How to Network

You have to have a certain set of skills in order to network effectively. It might seem easy, but for some people it is easier said than done to just walk up to people and start talking to them. Whether this is difficult for you or not, you will have to expand your comfort zone and learn how. There are a lot of great books and resources out there that can help you come out of your shell a little bit, if that’s an area you need to grow in.

Either way, one of the biggest tips is to listen more than you talk. My mom always tells me , “God gave you two ears and one mouth for a reason!” , meaning you should listen at least twice as much as you talk! People respond very positively when they feel like you genuinely care about what they have to say, and it’s one of the most basic techniques of building relationships and maintaining them.

Why You Should Network

So why should you network with other individuals in your industry? Because at the end of the day, networking with other real estate investors in your area is one of the most effective ways to market your real estate deals. By building relationships with other investors you are establishing trust with them and creating an environment where you can share information, resources, and market your deals.

Where Should you Start?

The first place you can start in San Diego is the San Diego Creative Investors Association, you can check them out at http://www.sdcia.com. This will be a great resource for you  to get started. You can also try your local building associations, and don’t forget events specifically targeted to your industry such as investor seminars, boot camps, and other events.

Here are a few action items to help stay focused in your networking marketing efforts:

“Key Components Of Networking To Remember”

• Understand what professions/people can benefit your business and in what way
• Plan which networking events apply to your networking goals and objectives
• Set networking goals for each meeting
• Know your audience and understand what benefits you can offer them
• Build relationships by showing genuine interest in people
• Follow up on regular basis to maintain the relationship
• Help others succeed and they will help you do the same

- from the Fortune Builders Flipping Houses Startup Guide.

This will help immensely with building your buyers list. If you have a network of people who you consistently communicate with and who trust you and what your business is doing, you will have a much easier time finding buyers for your deal, because all of these people you have developed relationships with will help you.

RedTrolleyHomes and RBD Ventures have joined ventures to work on a home settled in Encanto, San Diego Calfornia and made a complete walk through when they are assessing a property.

Here are the project details:

Estimated renovation time of 3 1/2 weeks

Estimated amount of the renovation is 25,000

Full rehab, finished property will be brand new

Installed new vital windows

Exterior was fully painted

New Cabinets

New carpet flooring in the living areas

New  tiles in the kitchen and bathrooms

Installed water heater and washroom dryer

New plumbing, drain mines, new copper water line and electricals

Increasing house from 3bed/1bath to 3bed/2bath

A spacious yard perfect for outdoor activities

RBD Ventures has made a huge effort in rehabbing their previous properties and the end result was stunning, so unbelievable. The detail and the finished product were really there, and the quality materials that the RBD Ventures picks out really makes a house completely united in the end.

Rehabbing a house is a major task but once you get hold of its beauty and see the whole package, the result is an amazing product. Rehabbing is not just for fix and flip properties, but also for buy and hold properties that cash flow.

Robb Bailey from Red Trolley Homes made a complete walk through video of a great single family home rental property in Memphis Tennessee.

Here are the main features of the house:

• Generally an amazing property
• The house has 3 bedrooms and 2 baths
• Two car garages with enough room to store stuff inside
• A very spacious backyard
• Nice generous living space
• The renovation of the house is about half way down with the process
• The interior was fully painted
• More trim work left to be done
• Cabinets and the kitchen were still being constructed
• The entire flooring will be followed afterwards

These are definitely a great selling features of  a property. It would take them a few weeks to finish the entire renovation of  the house but it’s worth the time and effort. There is still more work to do but the final result of total renovation will warrant a great rental price to a nice family.

Memphis Tennessee is a good place to invest in cash flow properties because approximately 50% of the city rents, there are lots of blue-collar jobs, and real estate values are fairly stable compared to the rest of the United States.

Rehabbing properties, or “fix and flip” properties, can earn you a handsome profit in a small time. You have to find a run-down property, repair it to market condition, and sell it at a higher value. It sounds easy but itcan be challenging finding such a property in the first place. Due to the recent real estate bubble burst, flipping has come to be associated with scams, greed, and deceit.

But real estate investors are actually the unsung heroes of this down economy and dire real estate market.

Common Misconceptions

First, flipping properties is not illegal. What is illegal is selling a property for higher than what it is worth by getting false appraisals. Rehabbers drive the value of the property up legally, restoring homes to like-new condition, thereby increasing the home’s worth. They then sell the property to families who want a nice house for a fair price.

Hold the property for the minimum holding period as defined by lenders, and get a fair appraisal done when you turn the property around to sell, and this will keep you alright by the law.

Rehabbing Property

You may not get to borrow money from traditional banks on properties that need a lot of work, so have a plan for financing your rehabs. Having cash is advantageous, you can also borrow hard money from lenders who are savvy with the rahabbing business. Otherwise consider private lenders, such as friends, family members, or business associates. You may have to pay a higher rate of interest but the profits are worth the extra fee.

1. Find out what the property is worth – When buying a rundown property, find out why the owner wants to sell it. Most often it is due to repairs, but owners tend to hide the extent of it so you should always do your own research. You should not take the seller’s word for it. You should have an inspection team (a contractor for example) go with you and check the property to make sure that all the repairs are estimated accurately.
2. Appraise the property – That done, you can appraise the value of the property by searching Zillow or the MLS (your realtor can help you with this) and name your price. Your purchase price should be calculated after considering the price you want to sell at, with your profit, the repair costs, and operating costs all taken into account during the repair period.
3. Find a buyer – You have to find a buyer once the house is all fixed up. Many buyers would be skeptical of buying a refurbished house. So if you want to sell it quickly, offer to help with the closing costs. Let the buyer do his inspection, but be ready to address any concerns they have so they feel good about signing a purchase contract with you.

Real estate investors seldom stick to one investment strategy. Choice of strategy is decided by market conditions, real estate prices and location. A strategy is adopted after a thorough market analysis and financial analysis. A real estate investor must not be rigid and be prepared to change his strategy according to factors around him.

Here are some entry level real estate strategies and how you should decide which option is right for you:

1. Wholesaling – Adopt a wholesaling real estate strategy when you have the ability to buy in short notice and have the resources to sell fast. If you have the right network of contacts, then a wholesaling strategy works out perfect for you. This is the preferred method for investors with no money, credit, or experience because all it takes to make money is a properly structured contract.
2. Fix and flipping – When you buy houses that require repair, the opportunity to purchase a home at a deep discount is present. You have to make a proper estimate of the condition of the house and its value to ensure profit. If you can manage the construction aspect, and find private lenders who will fund your project, then flipping is a worthwhile investment strategy.
3. Long term buy & hold – This is by far the most popular strategy among novice real estate investors. If you are going to use the property for living or vacationing in, then long term holding is indeed a very profitable option. Real estate always appreciates in any given cycle. But you must be able to forecast demand and property appreciation before you decide to buy and hold. Be prepared to tie up your money for a long time.
4. Rental or leasing – One way to pay off the mortgage or loan on a property is to lease it. This way, you own the place, build equity in the property, and can also improve your credit. Ideal for any real estate market with a higher rental rate to mortgage payment value, you must get a tenant that pays slightly higher than your monthly mortgage payment so as to make a steady profit month after month. Certain markets are better than others in this economy

For a full explanation of real estate investment strategy, resources to find private lenders, and the most profitable rental markets for real estate investors, sign up for Red Trolley’s free 7-Step Guide on How To Break Into Real Estate Investing.

To Make an Offer:
Call Robb Bailey @ 619-866-4475

Selling Price: $190,000

Repairs: $85,000

After Repair Value: $385,000

Potential Gross profit: $110,000 conservative

You have a second opportunity on this great REO property in Spring Valley, CA. Wholesale price is $190,000 for the rehab investor who isn’t afraid of a major rehab project.

Property was on hold with the bank since we last advertised this one for sale. Bank verbally accepted our offer, then never sent the closing docs over. Then they called us wanting to fire sale it off. Now we are buying it for a lower price, go figure!

Project needs the following:

• Layout adjustment to become 3bed/2bath
• Roofing
• Exterior
• Full Interior
• City Water Hookup
• Electrical/Plumbing

Huge vineyard on over half an acre, detached garage, AWESOME views. Contact us for more details, we have comps package and deal analyzer spreadsheet ready for serious inquiries.