Hey All Middle TN Members! Hope you are enjoying the weekend! We welcome newcomers! Just come and "sit in" and learn some...we would be glad to have you!
I'll continue to say this each week ---please don't think too much about the "assignment" and still come whether or not you've had a chance to "do your homework" It is just a way we can help hold one another accountable to progress. The two hours are solid "learning together" for us, so obviously the more you put into it, the more you'll get out of it, but regardless, just by "sitting in" and being a part of the discussion you'll get something out of it, and this may be your only RE for this week for whatever reason, so don't let the "to-dos" or lack of time to do them keep you from joining us! It's all in good fun.
OUR NEXT MEETING:
FRIDAY, OCTOBER 16
FOCUS: OUR BUYER'S LIST - QUALIFYING AND CONVERSATION
ROLE PLAY - CALLING SELLERS, FOR RENT ADS, and NEGOTIATIONS
Portland Brew - East
We'll be at a table UPSTAIRS!
I'll have my purple laptop again in case we have any new members joining us...look for the purple!
1921 Eastland Ave
Nashville, TN 37206
We will start at 11:00am promptly, so be sure to get there early to get any drinks/food --let's make the most of our time!
We are meeting for 2 hours as we have a lot to cover! If you are new and/or can only join us for a little while, come on!
If you are new - please send me a PM and I'll send you my contact info so you'll have it just in case in meeting up with us!
Assignment for this week: Call (and get a hold of) at least 3 sellers, and 3 "for rent" properties.
Keep tabs on your calls to give us a report:
How did your phone calls go?
What info did you gather on the phone from the seller/renter?
On a scale from 1 to 10, how motivated was your seller/renter? (1 being low motivation and 10 being high motivation) Why would you rate them there?
Anything you said most effective in your conversation? Mistakes? Least Effective?
Did you decide to move forward to make an appointment to see the property? Why or why not?
FIRST HOUR: Picking up where we left off last week ---Our Buyer's List
QUICK CATCH UP ---Brief update from each member on any successes or "things going on this week"
REVIEWING "THE LIST" of what we need to know on our buyers to help us negotiate our deals. Let's list out our list of "qualifiers" which may include: their current buying status, what they are looking for including single-family, multi-family and/or commercial, cashflow properties and/or rehab, do they have a minimum % off ARV or FMV that they will not go above?, what "cap" rate range if multi-family or commercial, minimum amount of equity in a property?, down payment money and "qualified up to $$$ for a mortgage" or cash price range, and any other pertinent information we collectively decide is important.
THE MONEY CONVERSATION
Is it just me, or does it seem uncomfortable asking someone like one of our buyers, "How much are you wanting to spend (price range)?" or "How much do you have for a down payment?" "How fast can you close?" While these are all good qualifiers, I am having trouble with this conversation. We all need to get VERY comfortable with getting this information in a way that let's our buyer know we are in it for THEIR best interest! Let's brainstorm. I truly believe it is all about the presentation. Bring any ideas and/or anything you've seen on Dean's site, Dean's books, the web in general on talking to buyers. Here's one idea ---Since we are working together to hook up our deals with buyers on our list, ---for instance, talking to our buyers about this to gather our information, for instance---"I am working with a group of investors who like myself seek out and negotiate deals on a consistent basis. We work together so it will not only be me finding deals for you, but a group of us will be working for you collectively to find the best deals out there to meet your needs. In order to understand our negotiating power to get YOU not only the best deal possible, and make sure YOU get the deal first instead of someone else, I have a couple questions for you...."
PUT THE APPROACH IN ACTION AFTER THIS MEETING: Let's gather "the list" from our buyers for next week using "the money conversation" we have practiced. Send each buyer's first name, along with "the list" once gathered to a volunteer in our group to combine them and come up with our collective "DG Buyer's List" to be shared at the next meeting so that we can be aggressive in searching for properties that meet our buyer's needs and get some deals going!
SECOND HOUR: Noon-1:00pm
CONVERSATION ROLE PLAY - CALLING SELLERS - CALLING FOR RENTS - NEGOTIATIONS ON FSBOs
Share your "homework" with us. After sharing our experiences this week ----I have some great material on the scripts in talking to people in all situations that I could share and would welcome anyone's input or anything they have to bring, along with us actually taking the role of the seller or one of us, the investor, and going through phone calls or "in person" negotiations. If you have used or found something useful in your calling or negotiating, or just an article or part of Dean's site or books that you found this week that you thought insightful or helpful to this process, please bring it and let us know. The "negotiations" discussion may take us into the following week's meeting. This is a lot to cover!
BRIEF RE-CAP OF FRIDAY, OCTOBER 9 MEETING
We ran the numbers on a couple properties using different offer formulas.
Here are the offer formulas we used (all from various sources including Dean's site, Dean's books, Success Academy, and other outside source):
FMV Formula: We found best way to come up with FMV (fair market value - which we also discovered is really ARV too - after repair value depending on which formula you are using) from our sources is: Look at 6-9 comps (ones actually sold, not ones still on market) that have sold within the past 3 months within 1 mile of the property you're looking at. Look at comps that are actually comps. If your property is a 3/2, only look at 3/2 properties. Use TotalView and select several of these comps. Look at what they sold for per square foot and write this number down. Take out the lowest number and take out the highest number. Then average all the rest of the numbers. Whatever your final average $$ per square foot ends up, take this and multiply it by the square footage of your prospective property. You have now arrived at FMV!
ARV: After repair value. For one of our formulas, asked us to look at ARV to start. Basically, we decided this was very much what FMV would be of course after any repairs needed to be complete on the house. So therefore, we used the same process as above for the FMV Formula and used that as our ARV to start in this instance.
SAMPLE FORMULA 1: (see ARV above)
ARV minus Repairs = "AS IS" Value
70% of AS IS Value = your BOTTOM LINE - MAXIMUM offer - your Bottom Line or you walk-away (don't start your offer here!)
ARV minus your BOTTOM LINE = your MAXIMUM potential profit IF the house sells for full value of ARV (but don't stop here ---it's not all yours yet!)
EXPENSES - You will have expenses ----holding, closing, selling (figured upon selling within 90 days)----want a short cut for these? 10% of ARV So 10% X your ARV = your approx. expenses
Now take your
MAXIMUM potential profit minus your Expenses = YOUR FINAL PROFIT if your house sells for full ARV.
Ok ---so this is taking me a while to write out & I gotta run! We used 2 more formulas, plus we have used a 3rd one in the past from Dean's website, so I will leave it at that for now!!
Cheers everyone! Have a great week!