What should a Wholesaler present when selling a contract?  

Wholesalers submit deals to me all the time.  And, typically what I get is, “Bernadette, I have this great deal in Brockton, it’s going for $225k, the ARV is $400k, the rehab cost is $80K.  What ensues is usually a back and forth of many different questions.  Do you want to know what a rehabber is going to want to see, before they will actually look at your deal?  

1. Summary of the Property. What type of neighborhood? Positive Attributes and any Adverse Conditions?  ARV, rehab estimate, comps etc…:  
2. Repair Estimate Worksheet
3. Pictures
   
   1. Exterior: Front, Rear, Side, Street View
   2. Interior: Every Room & Mechanicals
4. 3-5 Comparable Sales
   1. Within ½-1 Mile of Subject Property
   2. Sold Within the Last 6 Months
   3. Similar Structure (colonial, ranch, cape, etc.)
   4. Previous or Current Listings, if Appropriate
5. When you are doing your analysis (before you send the deal to anyone), make sure you remember that everyone wants to make money.  If you are wondering how to do that, refer to this Wholesaling Article. 

You can make a lot of money wholesaling, but, you will be able to make more if you are able to present your deal in a concise manner that will allow your buyers to make their decision more quickly. 

Happy Investing, 

Bernadette Trafton, Chief Connector 

 

 

  I hope everyone is having a wonderful holiday season.  I know my last blog post was about wholesaling properties, but, we’ve had so many people wanting to learn about wholesaling properties in the MA area, I felt like I had to revisit the topic.  I will recap what I wrote previously regarding remembering that everyone wants to get paid.  Remember that when you are formulating your MAO.  After that, I will cover the most asked question…”How do you find deals? “.  

There are a few ways to look at deals when you are trying to determine your Maximum Allowable Offer (MAO).  

First you can use a percentage minus the rehab costs to get a ball park figure.  Some folks use 65% of the ARV minus the rehab costs to get you MAO.  Some folks use 70%.  It really depends on the market you are working in.  The thought process is that 30-35% of the ARV will cover all costs and leave enough money for everyone to get paid.  Here’s an example using 65% – 

ARV – $300K  X  65% = $195K – Rehab costs – $75k; MAO = $120K

However, I prefer to work my way backwards to reach my MAO.  Using the same numbers from above, this is how it will look: 

ARV $300K, Rehab costs $75k, Hard Money Costs  $35k (will vary dependent on lender), Broker fees (5% typically) $15k, Holding costs $5k, Legal Fees $5k, Contingency $10k, Wholesale fee $10k, Rehabber profit $50k, MAO – $95K

Working your way backwards is more accurate, will CYA and leaves room in the deal for everyone to make money.  Newer wholesalers usually forget the rehabber wants to make money.  Typically, they would send me the same deal listed above and excitedly tell me they have the property under contract for $160k and can I help them find a buyer.  This is what I receive: 

ARV – $300k, Rehab costs $75k, Legal fees – $5k, Holding costs $5k, Broker fees (5%) $15k, Asking price $160k 

Invariably, I have to get back with them and explain they need to add hard money costs, some type of contingency/oops money and oh by the way, the rehabber is going to want to make at least $50k on this project.  If you can get the asking price down to $95k or $100k, then I will present it to my buyers list.  

So, wholesalers, when you are out there looking for properties and putting them under contract, remember to include all the costs because just like you, everyone wants to get paid.  🙂  Download Brownstone’s repair estimate calculator to help you out with your rehab numbers.

How does one find deals in and around the Boston area?   You can do direct mail.  Typically that has a 1% success rate.  You can do driving for dollars looking for broken down properties that look abandoned.  But, most of the deals you find are going to be while you are out and about networking.  And, I don’t necessarily mean networking at the real estate investors associations (although, you can find deals there too).  I mean “think outside the box” networking. 

Go to and join the local Chamber of Commerce meeting and introduce yourself as an investor who wants to buy distressed properties and help families out of bad situations.  When you are consistent, over time,  you will build your name as someone people can know, like and trust. 

Go to and join alocal BNI meeting.  BNI or Business Networking International, has several groups in MA, NH, RI, CT, etc…all around the country.  For MA, the website is www.BNImass.com .  There are meetings early morning and some at lunchtime.  Chances are, you will find 5-10 viable groups to go to around your area.  The best part about BNI is that you are able to build YOUR power team while you are training a group of sales people to look for exactly what you want so they can pass the referral to you.  You pay a yearly fee.  It’s somewhere around $600 for the year.  Before you balk at the price, think about it, for $600, you just hired an entire team of people who will be looking for off market deals for you.  As your power team, every group has a Real Estate Attorney, Mortgage Broker, Estate Planning Attorney, Realtor, P&C Insurance, Life Insurance, etc.  So, this serves more than one purpose, which is great.  It also helps you learn to speak in public and develop your elevator speach.  

Go to meetup.com and join groups that have activities that interest you.  Like hiking?  Join a hiking group and then start doing what you love and network with the people you are hiking with.  They will ask, “What do you do?” and then you can give them your elevator speach in a relaxed fashion.  Next time they hear of someone who is in a distressed real estate situation, they may say, “Hey, I know someone who can help.”  

Think outside the box when you are networking and have some fun doing things you love while you are out there.  You never know which referral partner your next deal will come from.   

For those looking for wholesaling training, I recommend Brownstone Building and Redevlopments program because it covers all the bases from finding deals to contracts to scripts to work with sellers.  Check it out at WHOLESALING FOR QUICK CASH 

Also, be sure to come to our meeting on Saturday the 15th.  Expert Wholesaling Attorney Christa Emerson will be covering wholesaling and contracts.  Check out out the details here!

Be sure to check out our upcoming events and we will see you at rehab tour in the near future.  

Bernadette Trafton, Boston AREIA Chief Connector

  Good day folks!

   Here’s to hoping that everyone is having a wonderful summer.  As of late, I’ve have some newer wholesalers bring deals to me.  And, when they present the offer price on the property, they, not intentionally have forgotten that everyone wants to make money in a transaction and it’s necessary to work your way backwards and include all the costs.  

There are a few ways to look at deals when you are trying to determine your Maximum Allowable Offer (MAO).  

First you can use a percentage minus the rehab costs to get a ball park figure.  Some folks use 65% of the ARV minus the rehab costs to get you MAO.  Some folks use 70%.  It really depends on the market you are working in.  The thought process is that 30-35% of the ARV will cover all costs and leave enough money for everyone to get paid.  Here’s an example using 65% – 

ARV – $300K  X  65% = $195K

Rehab costs – $75k

MAO = $120K

However, I prefer to work my way backwards to reach my MAO.  Using the same numbers from above, this is how it will look: 

ARV $300K 

Rehab costs $75k

Hard Money Costs  $35k (will vary dependent on lender)

Broker fees (5% typically) $15k

Holding costs $5k

Legal Fees $5k

Contingency $10k 

Wholesale fee $10k

Rehabber profit $50k

MAO – $95K

Working your way backwards is more accurate, will CYA and leaves room in the deal for everyone to make money.  Newer wholesalers usually forget the rehabber wants to make money.  Typically, they would send me the same deal listed above and excitedly tell me they have the property under contract for $160k and can I help them find a buyer.  This is what I receive: 

ARV – $300k

Rehab costs $75k 

Legal fees – $5k 

Holding costs $5k

Broker fees (5%) $15k

Asking price $160k 

Invariably, I have to get back with them and explain they need to add hard money costs, some type of contingency/oops money and oh by the way, the rehabber is going to want to make at least $50k on this project.  If you can get the asking price down to $95k or $100k, then I will present it to my buyers list.  

So, wholesalers, when you are out there looking for properties and putting them under contract, remember to include all the costs because just like you, everyone wants to get paid.  🙂 

Download Brownstone’s repair estimate calculator to help you out with your rehab numbers.  

Be sure to check out our upcoming events and we will see you at rehab tour in the near future.  

Bernadette Trafton, Boston AREIA Chief Connector

 

 

 

 

 

  Are you networking your way to success? 

  Every successful real estate investor I know gets most of their deals by networking.  Are you networking in all the ways that are available to you in real estate? 

There are numerous real estate investing meetings out there.  At these meeting you will meet many people who have the same goals that you have.  Their focus is to find deals and make money in real estate investing.  However, are you networking in ways that most others aren’t? 

For those of you who have flexible schedules or your J.O.B. isn’t a day job, you may want to consider going to some non-real estate specific networking events.  These events have people who may come across real estate deals, but, do have the knowledge or the desire to work them. 

For example, you may attend a BNI (Business Networking International) meeting.  At a typical BNI meeting you will meet a local real estate agent, real estate attorney, estate planning attorney, financial planner and others who may bring you real estate deals or others who may be interested in investing in your business.  There is a weekly time commitment and a financial commitment, but, when you have a group of business professionals looking to bring you deals, it’s worth the time and finances.  The great part about BNI is they only allow one seat per business type and there are few real estate investors in any of the groups.  You are allowed to visit any group who doesn’t have a real state investor in the group.  And,  you are allowed to visit each group 2 times before making a commitment to join any of them.  There are hundreds of groups in MA and NH.  So, that opens up lots of networking opportunities for you.  

Aside from BNI, there are a ton of networking opportunities out there.  They can be specific to something you love to do or specific to business.  Just go to meetup.com and do a search in your area.  You can also join the local Chamber of Commerce.  You will meet a ton of people in the business arena.  I have a friend who went to a Chamber of Commerce meeting that was held at an assisted living facility.  He made a connection with the head of the assisted living facility and has received 3 deals from there to date.  He was introduced to the children of the clients moving into the facility who had homes and they needed to close fast to help pay for the facility.  So, it has been a win-win-win situation for all involved.  

The key is you never know who will bring you your next deal.  So, get out there, network and meet some folks.  

Happy investing!

Bernadette Trafton, Chief Connector

 

  Happy Tuesday folks!

  There have been some requests for a private group for members only.  I try to listen to the members of Boston AREIA.  So, we created one!  In this group, we will:

• Collaborate
• Network
• Share ideas
• Share contacts
• Post Wholesale deals
• Go FB Live from rehab tours and monthly meetings

We have more members of Boston AREIA than are in the group.  Some folks don’t like FB.  But, having a group like this allows me to give more and work more with the members.  For example, I’m getting ready to do a direct mail campaign and I was able to reach out to the rehabbers in the group to ask what areas they are looking in.  When deals come in, I will be able to post them within the group.  If you need a lender or a contractor, you can ask within the group.  Next week, when we have the monthly meeting, we will go FB Live within the group.  Therefore, if you are not feeling well or can’t be there, as a member, you will still have access to the event.  

If you are a current member and haven’t received my email invite or added beacause we are friends on FB, then go to https://www.facebook.com/groups/BostonAREIA/ and request to become a member.  I will check to make sure your membership is current and then I will add you to the group.  If you aren’t a member, yet, but, see the value in being part of our online community,  Become a member today! And, I’ve added a few codes to get a discount on the memberships!  Individual members use code EMAIL to save $25 on the yearly membership and Joint members (Business partners, couples, etc) use code EMAILJ to save $50 on the yearly membership.  

This is taking your networking one step further!  It will give you the ability to develop your power team, make scheduling a time to grab a coffee simpler and give you a place to post deals, find deals, develop partnerships and will allow you to get the most out of your membership.  

Happy Investing!

Bernadette Trafton

Chief Connector

 

 

  Good day investors!  I hope you all had a wonderful holiday season.  In 2017 we saw alot of changes.  2018 has given us a promising start!  Here is to everyone’s success and for a prosperous 2018.  

People opt in to Boston AREIA everyday.  And one of the questions asked on the form is what do you feel is your greatest struggle in real estate investing?  Invariably, I get 2 responses. 

1. Prospecting/Marketing
2. Finding the money to do the deal

I always tell people, whether you are wholesaling, rehabbing or focused on buy and hold, finding the deal is the most important part of the equation.  Then you are in the driver’s seat and you can cherry pick the properties that you want to rehab or hold and you can wholesale the rest.  There are many ways to find deals.  You can prospect on Craigslist, network at meetings, go to auctions and auction sites, run direct mail campaigns and more.  The key is you need to be consistent with your marketing efforts. 

It’s important to have a strong presence online as well. It’s not the be all end all to finding deals.  But, it’s important that you have a presence online when people are researching you.  Perhaps you run a direct mail campaign or you meet someone at a networking event, many people are going to look you up online before they call you or work with you.  Therefore, it’s important to have a website, a strong FB page and preferably some reviews from folks you have worked with in the past.  This brings credibility to your business.  And, that is the one thing most new investors are lacking in real estate.  If you can build some credibility for a low cost monthly, it’s worth it. 

Finding money is easy as long as you have a real deal.  As long as you’ve done your numbers correctly, you used a good project estimate worksheet to run your rehab numbers, remembered everyone who is supposed to get paid from the lawyers to brokers, then finding the money is easy.  There are tons of lenders out there who want to lend their money, over and over again.  I don’t market specific ones on my website because I value my relationship with all of them.  But, if you are looking for a lender, be sure to reach out to me and I will make a connection. Bernadette@BostonAREIA.com

Remember, as long as you have systems in place online marketing is simple and be sure to run your numbers properly and the money will never be the problem.  

I look forward to seeing you on January 18th at Loss Mitigation Services of MA.  Read all details here!

 

  Happy Fall (or Autumn) folks!  I have been talking to alot of new investors over the last few weeks.  All of them are wondering if November is a good time for a rehab.  We are moving into the winter months and in New England that can equal harsh weather.  We already saw  crazy wind storms last week.  I had 2 gazebos set up in my yard.  The operative word is had.  They are no longer standing.  And, I saw weather reports that it was snowing up north in the White Mountains today.  So, I completely understand the question and the concern.  

I would say that every time of the year is a good time for a rehab.  But, November in particular is a great time for a rehab.  Think about it, your average rehab is 8 to 12 weeks to complete.  In the winter, depending on the weather, it could take a little longer.  It’s November 8th, you put the property under contract and close by the end of the month.  You start the rehab in December and you put the property on the market sometime in March.  That’s perfect for the spring retail sale cycle and perfect for the seller’s market we have been in.  The demand for rehabbed and new housing has increased while the available inventory has decreased.  In some cases, I’ve seen rehabbers sell the house before the rehab is completed.  This can get a little trying because your buyers will want to choose finishes and coordinating everyone to make choices can be difficult.  But, chances are, the time on market is going to be low because demand is currently high.  So, now is a perfect time for a rehab!   

When you are running your numbers, make sure to add extended holding costs in the event weather causes the rehab to go longer than the projected scope of work dictates.  Remember to account for possible snow removal and heating the property (you don’t want any frozen pipes).  It is always about the numbers. 

But, if you are nervous about going into the winter doing a rehab, you can always wholesale!  Not sure how to wholesale and want to learn?  Check into this wholesaling for quick cash course with Brownstone RG.

I look forward to seeing everyone on Thur, 11/16/2017 for our upcoming meeting at BR Stone in Woburn.  Happy investing everyone!

Bernadette Trafton

Boston AREIA Chief Connector  

Good morning folks!

This morning I got an email from a lady asking if she should spend $40k on a real estate investing mentoring program.  Without knowing which program or what she was getting for $40k, my initial reaction is, “If you have $40k just laying around, it should be going into a deal and setting up your business.”  And, then I asked her if the mentoring program was going to supply her with her first deal and could she earn money back on it.  She of course told me no it did not include them sourcing her first deal, but, they were giving her access to their lenders and others to help her with projects.  I tried to explain to her that she will have access to their lenders and it is another way for them to earn money off of you over an above the $40k she’s already spent.  

Most people who have come to Boston AREIA know that we do not have selling speakers pitching their programs at our meetings.  That’s not to say I don’t believe in education or coaching or mentoring.  I definitely believe in education and investing in yourself where your business is concerned.  I just don’t agree with the high pressure, high pitch sales tactics that are used.  And, after being in real estate and running Boston AREIA for over 10 years, I have seen people spend a ton of money on education, but never end up doing a deal or doing anything to make that money back.  I’ve watched people do everything from eat away all the equity in their homes, lose their homes and get divorced because of their pursuit of real estate education.  Now, don’t get me wrong.  A good portion of the reason I watched some people go into the education overload abyss, so to speak, is because they didn’t take action AFTER they bought the course.  That is something they need to own.  However, the guru’s selling pitch is usually regarding taking action.  And, they make it seem like the biggest part of the process is taking action to buy the course.  I’ve watched people get caught up in that portion of taking action.  But, that’s not the part that matters at all.  

It’s the main reason we stopped having selling speakers at Boston AREIA.  And, let me tell you, it’s harder to get local active real estate investors to come and speak at a meeting than it would be for me to call up some of the gurus and have them come and sell their courses.  It’s far less profitable for the group because we aren’t earning anything from course sales when the speaker isn’t selling anything.  It is, however, far more valuable to the attendees to meet local real estate investors in their market.   I have seen people be successful with guru courses, but, I’ve seen far more not be successful to continue inviting the gurus to speak.   

I have found a solution over the years with some local real estate investors I work with.  They do over 100 rehabs a year and have developed solutions for everyone who wants to be involved in real estate investings.  I told this budding investor, before you spend $40k on a guru course answer a few questions:

1. Why real estate investing?  Do you just think it would be cool to learn or are you passionate and want this to be your career? 
2. Is this money expendable or will it hurt you financially if you never make it back?
3. If it is expendable, does the guru source your first deal for you?

I then recommended that she start with a monthly coaching option similar to what Brownstone RG offers.  I say similar to, but, I haven’t really seen a monthly coaching program that offers what they offer for $97 a month.  I mean for $97 a month, or the cost of a latte a day, she will learn a ton about real estate investing and will learn a ton about herself in the process.  She will learn whether she has the desire and the focus to be a real estate investor.  She will learn her own motivation.  Will she take action on the lessons she is presented with? Did she complete the setting up your business section? 

• No, then it’s probably not her thing and she will have learned that for $97 instead of $40k. 
• Yes, great, move onto the next step of learning in the coaching program, you still only paid $97 instead of $40k. 

Brownstone does have the big guru mentorship program as well.  It’s called the Fast Track Joint Venture Program and is focused on people wanting to learn to rehab.  The biggest difference that I’ve seen with their program is they train you to find deals, however they also source your first rehab deal for you.  They have a Senior Project Manager oversee and train you on how to complete the project and you get a portion of the profit from the deal when it is sold.  If you are passionate about real estate and have expendable funds, this is a great program for you.  However, if you do not have expendable funds and you are looking to try real estate investing to see if it’s a good fit, then the monthly coaching option is the best.

I’m not sure what she’s going to do.  Only time will tell.  But, I figured is she was pondering this type of question, others are doing the same.  Hope to see you at our upcoming events.  October 19th we will be in Quincy with Boston Property Ventures, LLC.  They have some great development projects in and around Boston they will be going over and on October 21st we will be in Bridgewater at a rehab tour with Jerry Lima and Renee Jean from Brownstone, RG. 

Happy Investing!

Bernadette Trafton

Boston AREIA Chief Connector 

 

 

Last chance to take advantage of these incredible offers!

We are having an end of the month, everyone is back in school membership special!  For those who become a member of Boston AREIA by Monday Oct. 2nd, get a discount on the yearly membership!  For individual memberships, save $25 using Promo Code EMAIL and save $50 on a Joint Membership using code EMAILJ.

JOIN TODAY!

I’ve been going through the Brownstone monthly coaching course and it’s been awesome.  I can’t believe the information that is available in this online coaching program.  In fact the offer is so good, it’s going away!  Be sure to take advantage of this incredible offer before Monday October 2nd.  After that, the $1 option is going away!

$1 Coaching option from Brownstone!!!  http://brownstonerg.com/monthly-coaching/

Use code BAREIA to take advantage of this!

As I said, this offer goes away on Monday October 2nd.

Here’s what you get:

• Monthly Video Training
• Weekly coaching calls
• Quarterly Mastermind Sessions
• Monthly Case Studies
• Master Scripts for Success
• Project Based Checklists
• Scope of work documents
• Budget Templates
• Project tested contracts
• and much more project related information
  

You will learn how to:

• Find Good Project Opportunities
• Figure out what the cost of repair will be on a project
• Analyze a deal to figure out what you can offer and still make a great profit
• Plan out and organize your weeks for the greatest leverage and success\Stay laser focused on your business to drive huge success

$1 Coaching option from Brownstone!!!  http://brownstonerg.com/monthly-coaching/

Use code BAREIA to take advantage of this!

As I said, this offer goes away on Monday October 2nd.

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Monthly Meeting October 19, 2017

How to turn a rehab into a legacy w/Peter McLoughlin of Boston Property Ventures

Join us at Boston Property Ventures, LLC

36 Miller Stile Road, Quincy, MA 02169

5:30 pm Networking 6:30 pm Meeting

CEO of Boston Property Ventures, LLC, Peter McLoughlin will share how he began with one rehab and in 16 years grew it into a conglomerate of companies covering development, construction, property management and lending.  He will cover where he was at when he began, how he got to where he is and where the company is heading.  He will share a history of projects and current projects the team is working on.

Peter McLoughlin is a Principal and Founder of Boston Property Ventures, LLC (BPV). Since…READ ALL HERE

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Download this Project Estimate Worksheet!

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TOP 3 MISTAKES PEOPLE MAKE WHEN SELLING VIA SHORTSALE

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Bernadette Trafton, Boston AREIA Chief Connector