00 Prepare To Succeed Planner

Prepare To Succeed Plan
Email to Brian Gibbons brian@creiu.com
My Plan

6 mo. 1 yr. 5 yrs. 10 yrs. 20 yrs.

Personal Goals, your health:

Mental education:

Spiritually:

Family, you and your family:

Vacation, travel plans:

Fun, hobbies:

Monetary, Career:

Charitable goals, helping others:

CURRENT JOB

Monthly income: Annual income:
Current savings: Current expenses:

Job satisfaction: 1-10:
CURRENT CREDIT: Excellent Good Fair Bad

INVESTMENT SAVINGS

Car:
IRA:
Employee programs:
Cash:
Stocks/bonds: Avg. yield:
Real Estate:
Other:
YOUR PERSONALITY TYPE
Analytical
Love to deal with people
Love to work with numbers, programs
Love to work with hands
Love to be alone
Great with big picture
Great with details

AVAILABLE AMOUNT OF MONEY TO INVEST IN REAL ESTATE (Remember to keep a cushion)
Cash: Brokerage loans:
Credit lines: Private loans:
Equity line: Family loans:
Unencumbered assets: Credit cards (risky):
IRA:
Collateral to pledge for bank loans, real estate, stocks, bonds, ????? and financial statements:
Banking relationship:
Income goals:
Cash flow for real estate wealth accumulation:

WORKSHEET

Annual Income

Annual Income Actual

Annual NEEDS GOALS INCOME

Current

1 year

2 years

3 years

4 years

5 years

1 0 years

15 years

20 years

Free hours, or hours available to spend on real estate weekly:

1-5 6-10 11-20 21-30 31-40 41-50 51-60 61-70 71-80

MY PLAN


Little or no capital/credit requirements


1. Flipping

• Look at 20 houses
• Lock-up 3
• Flip 1
• Average flip: $3,000-7,000

2. Lease Optioning

• Call on 20 houses
• Negotiate with 4
• Lease Option 1
• Average monthly cash flow: $200-400
• Option profit: $500-3,000
• Beware of repair and vacancy

3. Sandwich leasing

• Call on 20 homes
• Negotiate with 4
• Sandwich lease with 2
• Monthly cash flow $100-400

4. Mortgage Brokering

• Search, advertise for mortgages
• Find 2 decent ones
• Close on 1
• Average brokerage commission: $1,500-5,000
• May need license

5. Brokering Tax Certificates

• Research local rules.
• Find investor,
• bid at auction for investors.
• Can be complicated.
• Liability can be high.
• May need license, though you could make substantial commissions and find great deals to flip.
  

6. Private Money Brokering (may need license)

• Find lenders, find good loans
• 1-5% spread a month
• 1 -1O points up front
• Example: Broker $40,000 loan (11-1 3%, 15 year loan) 5 points = $2,000 up front, 2% spread at $60 month for the life of the loan.

7. Flipping with taking back a note or cash and a note

• Flip property, take back a second mortgage as your “commission”.
• Cash and monthly income.

8. Real Estate Agent - Commissions

• Average commissions on a sale are 5-70%.
• You may have to split commission, plus pay your brokerage 20%-70% of your commission.
• Sell a $100,000 house with a 6% commission and you earn $6,000.
• May have to split with other agents and your broker.
• (Need license)

9. Consulting

• Consult with investors, retirees, non-profits, governmental agencies, real estate firms, estates, attorneys, CPA’s, financial planners, give seminars.
• Promotion costs may be high.
• Your fees $35-200 per hour or commissions,
• flip potentials.

10. Property Management

• Need legal entity.
• Bank accounts, computer (preferably).
• Liability insurance $800-2,000 annually.
• Receive 8%-11% of rents collected monthly.
• May keep late fees, charge tenants $50-150 application fee.
• Charge $50-150 lease renewal fee.
• Charge for, and own your own maintenance company.
• May need to be a realtor. Profits come with volume.

11. Maintenance Company

• Make ready empty units.
• Apartment “get ready”.
• Fix-up/clean apartments and houses.
• You can do it or a sub-contractor.
• $8-1 0 hour or by the job.
• Painting, carpet cleaning, rehabilitation, landscaping.

12. Contract for Deed/Lease Options

• May be able to negotiate for little or no money down.
• You can control property, lease/option or contract for deed for more money per month.
• Get option/deposit money up front.
• Example: You can lease/option or contract for deed a house for $40,000, with $500 down, $4OO a month for 20 years. You turn around and lease option/contract and deed it for $1,500 down, $600 a month. You make a $1,000 profit up front, additional $200 a month profit for the next 20 years.
  Average up front profit: $500-5,000.
  Average monthly profit: $100-500
  Little or no landlord headaches if done correctly.
  
  CASH, CAPITAL AND/OR CREDIT MAY BE REQUIRED
  
  1. Buy, rehabilitate, and sell
  
• Need purchase money.
• May get owner's terms.
• Need money for repair costs and holding costs.
• Average rehab should net you at least $12,000 or about 30% of retail sales price.
• Alternative to cash: use investor's money, partner the deal, equity sharing, or use credit lines.

2. Buy and hold real estate

• May need cash for down payment and repairs.
• great wealth accumulator.
• Great cash flow each month.
• Rule of thumb: a single family house should have a cash flow of at least $100-150 per month before vacancy and repairs with a 65%-75% loan on it.
• Duplexes should cash flow about $200-400 month before vacancy and repairs.
• Multi family depends on capitalization rates, type and size.
• Management can be a headache.
• You can hire a manager for between 7% - 11 % of gross monthly rents.
• Great for cash flow, wealth accumulation.

3. Buy and create paper by creative selling

• You need cash or credit to buy and fix-up.
• You then sell, taking some cash and/or a note and/or an installment deed or a land contract.
• Generates profits and cash flow.
• Beware of the tax burdens that come with the profits.
• Your notes that you hold are marketable.
• You can sell them at discounts to raise cash.
• Good monthly income.
• Few, if any, management headaches.

0201 US Bank, Inc. installs policy to prohibit funding on flips within 90 days

0201 US Bank, Inc. installs policy to prohibit funding on flips within 90 days
Friday, May 20, 2005

By Jessica Swesey
Inman News
Banks and financial agencies are taking action against property flipping practices that may result in financing a falsely inflated home loan, which can lead to huge financial losses for the institutions.

US Bank Home Mortgage this week implemented an "anti-flipping" policy for conventional home purchases, saying it will no longer fund loans for properties in which the seller has held title for the property for less than 90 days, according to a memo sent out Thursday from US Bank Home Mortgage wholesale operations.

Property flipping has become "a threat to the integrity of the residential real estate industry," the US Bank memo states.

Flipping occurs when a home is bought and then quickly sold at a higher price. Legitimate investors practice flipping to make profits on real estate deals after some repairs or upgrades have been made to the subject property.

However, many mortgage fraud schemes involve flipping properties that have falsely inflated appraisals, enabling crooks to buy cheap and make back two or three times their investment.

In a fraudulent property flip, the lender could end up holding a property worth far less than the mortgage that was funded.

The US Bank policy is set for all conventional loan applications dated June 1, 2005, and after, the memo states.

US Bank representatives weren’t immediately available to provide more details about the anti-flipping policy.

Alex Stenback, a mortgage banker with Prime Mortgage Corp. in Minneapolis, said US Bank’s new anti-flipping policy is "a sign that the big banks are now noticing this is becoming a problem."

Mortgage fraud continues to increase in the United States, with the number of suspicious activity reports to the FBI in 2004 almost triple those in 2003, according to an FBI report.

In 2003, 6,936 suspicious activity reports were made to the FBI, and the number zoomed to 17,127 in 2004, the agency reported.

Stenback, who received the memo from US Bank on Thursday, said he expects other large lenders may soon follow suit.

US Bank’s new policy is positive for the industry, however Stenback cautioned that it won’t eliminate flipping or fraud.

If all the top institutional lenders implement similar 90-day seasoning policies, he said, "You have the subprime market out there waiting in the wings who would be more than happy to finance ’flipped’ properties."

People will still be flipping properties, and inexperienced buyers could end up holding high-cost loans on overvalued properties.

US Bank’s action follows a similar rule the U.S. Department of Housing and Urban Development put in place in 2003 that makes home re-sales occurring within 90 days of the last purchase ineligible for a federal mortgage through the Federal Housing Administration.

The federal housing agency had analyzed examples of predatory lending and found that the most egregious examples of predatory lending were on property flips that occurred within a brief time span, often days.

Freddie Mac, the nation’s second largest mortgage buyer, last October implemented automated property valuation warnings for lenders using its Loan Prospector underwriting system to help them spot and hold funding on potentially fraudulent loans.

The company’s automated valuation model quickly estimates the subject property value for lenders and compares it with the stated value. If the value is excessively high – a common sign of fraud-in-progress – the system will return a feedback message to the underwriter.

Freddie Mac also has an aggressive fraud unit, company spokesman Brad German said.

The company’s anti-fraud efforts have led to more than 100 indictments by federal and state prosecutors, 76 convictions, nearly $75 million in civil judgments and $20 million in criminal restitution orders, and recovery of nearly 70 percent of the company’s fraud losses.

German said the Freddie Mac fraud unit works with state and local law enforcement and provides training to the FBI.

In addition, the mortgage finance company maintains a list of about 255 companies and 464 individuals that are excluded from participating in transactions involving Freddie Mac loans.

Freddie Mac has a toll-free fraud hotline at 800-437-2838 where loan originators and other real estate professionals can report suspected fraudulent activity.

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0120 FMS means Finding Motivated Sellers

0120 FMS means Finding Motivated Sellers

Must do’s:

• Get a tracking Sheet with AD BYLINE, DATE CALLED, APPOINTMENT SET Y/N
• Let the Ad run for 2 weeks every day before you change the ad
• Be trained in a script to ONLY SET THE APPOINTMENT AND SEE THE OWNER
• Handle objections, like: "What is your PROGRAM ALL ABOUT?"

CLASSIFIED "BUYING" ADS

NEED TO SELL FA$T?
Behind in Payments? No Equity?
No Problem! Call Bob XXX-XXXX

WE BUY HOUSES
We take over payments
No equity, no problem
We will buy or lease your house
No commissions/fees
555-5555

I’ll buy YOUR house FA$T!
All Areas & Any Condition!!
xxx-xxx-xxxx

Do You Own a...BAD HOUSE?
Vacant? Needs Work?
Bad Tenants? Can’t Sell?
We Can Help
Call xxx-xxx-xxxx

$ Sell Your House FAST $
Behind in Paymts? Little Equity?
No Problem (334) xxx-xxxx

Want to sell your house in 1 day?
or I’ll make your payments
Call Bob, why wait?(850)xxx-xxxx

Need to sell FAST?
We’ll Buy Your House
Any Condition. Any Area
Call (334)xxx-xxxx

Behind on Your House Payments?
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and Take Over Your Payments
Call us at xxx-xxxx

Want to sell Fast!
Even if it has problems..
Repairs? Need to move?
Call us xxx-xxxx

Is Your House A Headache?
Need To Sell it FAST?
We Can Close in 3 Days!
Don’t wait xxx-xxxx

Sell Your House – Today
No cost to you. We pay top $
Call Bob xxx-xxxx

Sell your house today
CASH OR TERMS...YOUR CHOICE
Call Bob xxx-xxxx

Sell Your House FAST!
We’ll take over and make
up back payments!!!
Call us xxx-xxxx

Want to sell your house?
We Take Over Payments.
We Make Back Payments.
xxx-xxxx

Consider your house sold!!
Little Or No Equity?
No Problem. Don’t wait!!
xxx-xxxx

CLASSIFIED AD IDEAS TO SELL

Owner finance Must Sell,
Executive Home w/pool
Open House 2-4 PM Sunday
First Cash Down that day will own!
123 Anywhere Street!
xxx-xxxx

"OWNER FINANCE No Credit!"
3/2 WITH POOL / Home will be
sold to first person with down
payment of at least $3,000. at the
Open House, Sunday 2-4 @ 123 Anywhere Street!
xxx-xxxx

EL CHEAPO!
House worth $85k & needs some
cosmetics. Owner may finance OR
best offer over $65k takes it this week!
xxx-xxxx

FOR A REHAB

EL Cheapo!
Attn: Investors!
Make $XX,000.00 on this one!
Will let go at $20K.
See at 212 Anywhere Street
Call xxx-xxxx

Handyman Special, Cheap, All Cash
Call xxx-xxx-xxxx
_____________________________

Five Key "Selling" ad elements:

1) A benefit-telegraphic headline
2) A true marketing message
3) An offer, or offers
4) A reason to respond immediately
5) Precise response instructions and mechanisms