Pages

Enter email:  
Showing posts with label exit strategy. Show all posts
Showing posts with label exit strategy. Show all posts

Monday, June 10, 2013

Cleaning & Securing an Investment Property Adds Value


As soon as we close on an Investment Property, we want to implement our Exit Strategy. The faster you get this distressed investment property back on-line the less money you are losing due to holding costs and the quicker the asset will cash flow. Every step we implement adds value to the property.

The first part of bringing the property back on-line is to Clean and Secure the property. This adds the most value to the property with minimum overhead. Below is an outline that describes the basic process of cleaning and securing a real estate investment property. By the way, most of these steps you can do it yourself.

Clean and Secure Process

  • Removal of debris from Interior & Exterior of House - If the investment property has been abandoned or on the market for a while, chances are there has been a buildup of debris and the property was broken into and trashed. The property becomes an eyesore and the city is just waiting to pounce on the new owner.
    • Dumpster container picture from Ocala property.
      Dumpster for Debris
    • Order a Dumpster - Depending on the amount of debris, you may have to order a dumpster. Delivery and removal are handled by the Dumpster Company. You just pile in the debris.
      • Can be very expensive.
      • Neighbors will help themselves by using your dumpster to pile in their debris.
      • Permit Fee is built into the price. The City keeps track.
        • Suddenly, city inspectors will begin to show up to see what you are up to and do you have the proper permits.
      • Neighbors can see the dumpster on the premises. They will report you to the City.
    • Finish cleaning and get rid of the dumpster as soon as possible. Less attention.
  • Recycle Materials - Every house contains items that you can recycle and receive money for these items. We are serious! You can start pulling cash out of the property right away.
    • eBay - You can place in eBay's Classifieds an ad selling items you found inside the property. It Works!
    • Metals - based on cost per pound.
      • Non-Ferrous - You know the metal that doesn't let a magnet stick to it.
        • Copper, Brass, Aluminum, Lead, Tin, Nickel, Gold, Silver
        • A/C Coils, Radiators, Batteries, Pots, Stainless Steel, Motors, Transmissions, Bathroom Fixtures, Electrical Wire.
      • Scrap - Less money. Pull wiring and motors off of appliances and recycle them separately.
        • Iron, Steel, Sheet Metal, Rebar
        • Old Appliances, Water Heaters, Non-Copper Pipes
        • Dryer & Stove Electrical Wiring
          • Three prong cords - Found on ranges and dryers.
  • Make sure all access points are secure
    • Doors with locks
      • Locksmith - You made need one if you are not handy with installation
    • Windows are covered with wood, rejas (metal bars) or original window.
      • If glass is cracked or missing must board whole window.
      • Board on window must be painted & uniform with other boarded windows.
      • If there are iron bars on the bedroom windows, they must have breakaways. Minimum size 20 x 41 inches.
      • If all windows are boarded, air holes must be drilled into plywood to provide ventilation.
      • Independent Securing Service - If you don't want to board up your property by yourself.
    • Secure your Outside Water Access - People will steal your water, especially if your neighbors have well water and you are connected to the City Water System.
  • Landscaping

By cleaning and securing the property you are adding value to your property right away, preventing break-ins, getting the city off your back and who knows, sell it as is to another investor for a nice profit!

Written by

Related Links, Blog Postings, Presentations or Articles:

Written by +Bob Burns.
 
####
 
Bob Burns at MREIAs speaker podium.Clean and Secure!
Bob Burns Print Signature Photo
+Real Estate Investor
about.me/RobertKBurns
Telephone #: 305-586-5280
email: sec8@planocho.com

Follow US Baby!

Top Blogs

Monday, March 26, 2012

Real Estate Investors need to use an Action Plan.

There is a saying among Real Estate Investor's - "You Make Your Money when You Purchase the Property not When you Sell It."

There are so many things that can go wrong so it is important to make sure you buy the property right.

Smart Real Estate Investors need to develop an Action Plan before they are going to purchase an investment property. This plan should include the following:

  • Identify a possible property for investment.
    • Make sure your SELLER is MOTIVATED to do the deal.
  • Perform a market analysis.
    • What are going to be your carrying costs for the next 90 Days. Principal, Interest, Insurance, Taxes, Utilities, HOA fees....
    • After Repair Value ARV - What is the property worth after repairs. Look at the COMPS! Yes, the comparables.
    • Calculate your repair costs.
    • Calculate your Fair Market Rent FMR. See if the property is going to cash flow.
  • Secure Your funding for:
    • Purchasing the Asset.
    • Carrying Costs.
    • Repairs.
  • Note: Don't forget to pay yourself for all this work you are doing!
  • Make an OFFER based on the Maximum Allowable Offer MAO Rule, using ARV, Carrying and Repair Costs.
  • What are you going to do with the asset? Develop an EXIT Strategy:
    • Flip the property for a profit or
    • Hold the property for Cash Flow.

This is the basic action plan which needs to be very fluid. Things change and you need to adapt.

Turnkey Property!

One of the more successful Action Plans we have used is to bundle a Section 8 or Plan Ocho tenant within the property FOR SALE. The tenant is part of the BUYER's Turnkey Package.

TURNKEY means the BUYER simply needs to turn the key to the front door and start making MONEY.

All the hard work has been done for the BUYER:

  • Buying a Property that will Cash Flow.
  • Rehabbing the property and brought up to Code.
  • All utilities are functioning.
  • Finding a reliable tenant.
  • Asset Protection strategy is already in place.
  • Selling the Investment Property with minimal Closing Costs.
  • Optional: Have it already furnished.

Investors should provide a turnkey solution for all their properties they plan to sell in the near future.

BUYERS like the idea of purchasing a property that comes bundled with a tenant.

Action Plans allow for Immediate Cash Flow and no Headaches!

Written by Bob Burns.
 
####
 
The caricature of Bob BurnsMoney in The Bank Baby!
Bob Burns Print Signature Photo
Real Estate Investor
about.me/RobertKBurns
Telephone #: 305-586-5280
email: sec8@planocho.com
Our Internet Footprint:Section Eight Icon Face Book Icon LinkedIn Icon Twitter Icon Youtube Icon RSS Logo  Top Blogs