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PROCESS:

1. Build the relationship with the agent (SJ REI Sunnyvale, exchange cards)
2. Get a lead
3. Run comps
4. Set up a time to see the house
5. Like the house we submit an offer
6. Obtain hard money funding or private
7. If we win then we close escrow
8. Fix it up
9. sell it

Run the comps

STEP 1: Understand the property

2124 Terilyn, San Jose, CA 95122

notes: East san jose, near freeway, not the best not
little congested, new homes, eastridge, pretty high demand, restaurants
buyer: home owners or investors to rent out
vietnamese or hispanic

not too busy street
decent looking, enough parking for everyone

neighborhood: ok 7/10
schools: ok decent 7/10

3 beds | 2 bath | 1,128 sf | Built 1961 | Lot 5,100 sf

1 story | 2 car attached | SFR

notes: roof?????? most likely $10k

STEP 2: Understand the values in the area AS-IS .... ARV

AS-IS = $550k and same sf 1,100 sf 888 sf

Our goal is to get less $550k

$525k

ARV=

COMP #1: 2053 Terilyn (Same street!!)

SOLD for $750k on 2/12/18

3 beds | 2 bath | 1,304 sf (slight bigger ours is only 1,128 sf about 200 sf bigger)

Condition: livable, move in, not updated but good enough for rental

THEREFORE... if this sold for $750k NOT fixed up.... and 1 year ago maybe $750k to $800k

COMP #2: 1542 Pensacola Dr

3 beds | 2 bath | 1,128 sf ---- SOLD for $801k on 6/7/18

Condition: Lovely one story Home. Great opportunity for First Time Home Buyers or Investors. Open floor plan. Kitchen has wood cabinets, granite counter tops and tile floor. Living room and all bedrooms have Original hard wood floors. All rooms have crown molding and baseboards. The 2 full bathrooms have tile floors. Double pane windows.

THEREFORE.... we can probably hit $800k because this was a year ago and 2019 prices are still about the same , same exact floor plan

COMPS #3 :

STEP 3: UNDERSTAND THE FLIP NUMBERS OR WHOLESALE

Scenario #1: $525k

Price: $525k
Repairs: $50-75k

Total costs: $600k

ARV: $800k

Gross Profit: $200k

Closing costs: 5-10% = 80k

Net Profit: $120k (IF ALL CASH)

Hard money costs: $800k @ 10% = $80k (let's say 6 months) $40k in interests

TRUE NET: $80k

Scenario #2: 550k

$55k if we had to go $550k

tell agent to submit an offer $525k...... and then $550k

Q. BRRRRRR

Buy Rehab Rent and Refi

WHY NOT BRR??????

Price: $525k

Repairs: $35k

Total costs: $560k

RULE of thumb: Every $100k in loans is $500 in monthly payments

Q. what is your monthly payment $2,500 round up $3,000

q. how much can you rent a month $3,100

so. NOT CASH FLOW CAN'T

$400k repairs: $30k total costs: $430k VALUE now $750k-800k

Loan payments - $2,000

Rent: $3,100

Cashflow : $1,100

REFI $500k out and pay off the $430k

loan payments on on $500k = $2,500

that's how you BRRRRRRR