100629 you'll need plan be if
DESCRIPTION
Being flexable in uncertain times regarding unplanned business challenges and person life changes.TRANSCRIPT
Saving
The Planet
One House
At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010
You’ll Need Plan B If:1. You spent too much
2. You mis-judged the neigborhood.
3. The Economy Changes
4. The Market Changes
5. Your Life Changes
6. Your Philosophy Changes
7. Your Options Change
Saving
The Planet
One House
At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010
Review Of 8 Exit StrategiesAt GreenEarthEquities.com
Type 90728 in the search boxFor the 8 Exit Strategies.
***Know how you will get out...
Before you get in.
This should include at least:Plan A, Plan B, &Knowing when to
change plans. Summary on the next page
Saving
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One House
At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010
1. Buy & Wholesale Flip2. Buy, Renovate & Retail To
Homeowner3. Buy, Renovate, Retail Flip
With Discount Equity4. Buy, Rehab, Seller Finance &
Mortgage Note5. Buy, Rehab, Rent, Cash Flow
& Investor Flip6. Buy, Rehab, Rent, Package &
Sell to Investor7. Buy, Rehab, Sell with Lease
Option.8. Buy, Rehab, Re-Finance
Equity & Rent
My Favorite in last year’s Seller’s Market
Not enough room for Energy Package
Takes more money than most of us have
Not enough room for Energy Package
This can move a hard to sell house.
Opens up a bigger pool of buyers who aren’t as demanding of concessions (may need to
combine with #8 to get your cash back)
A good choice if Plan A (#2) doesn’t work. You get your money
back and keep going
5 home minimum
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Blessed Are The FlexibleFor they shall not get stuck with bad plans that aren’t
working.
Know when to hold ‘emWhen to fold ‘em
(& change strategies)
One Plan might be to 1. do the renovation.
2. Market it for sale for a month, If it doesn’t sell, 3. Change strategies, Re-
finance and rent ..... ?
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Flip vs Buy & Hold
Benefits of Energy Wise Flipping (For those who care about
Green and the Environment and Carbon Footprints)
(Most Investors dont)
Eliminate more blightMore Green Jobs
Improve NeighborhoodsIncrease Tax Base
More Carbon ReductionLess Reliance on Foreign Oil.
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Spent Too Much OrMis-Judged The Neighborhood
These two usually go together.One causes the other.
If you find potential buyers saying, “Great house, but not quite the neighborhood we’re looking for”... It may be time
to switch plans from #2 to #8.
It will require refinancing for you to stay in the game
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Economy, Market Changes
These two may be connected but maybe not.
The Economy was pessimistic 2 years ago, causing most
investors to “sit out”That made for a great
buyers market.Now Optimism has brought hordes of investors back in,
reducing the inventory, making good deals harder to find and
more difficulty to sell at a high price
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Buyers Market - Sellers MarketWhen more buyers come into
the market, like now, the
inventory shrinks and good
deals are harder to find.
These homes then flood the
market making good prices
harder to obtain at time of
sale. This may indicate a time
to change exit strategies.
(from 2 to 8, for example)
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Life & Philosophy ChangeI’m moving to Virginia
(Following the Grandbabies)GreenEarthEquities will
continue in California with the team we have created.This removes one of my reasons to prefer only
flipping(Disliking Landlord Issues)
Because those responsibilities will now fall to my associate, I can now
consider #8 BRRR
Saving
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Options Change
I am not suited for landlord responsibilities, preferring to design new systems, spend time with grandbabies and
protect my wife from pirates on cruises. Since Rob will
now be assisting me in taking care of those issues,
the #8 BRRR exit strategy becomes a viable option.
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Changing Directions:
Original Plan:Retail Flip Strategy # 2
Changes:1. We mis-judged the neighborhood.75% of potential buyers discounted
us for “neighborhood”
This home appraised $7000 under asking price (our first one)
2. It’s become more of a buyer’s market
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Challenges Of Changing:The home was purchased with
Line of Credit Money. This needs to be kept turning over, so it’s good for flipping but not
for holding and renting
Solution: #8 BRRR (Refinance)
Refinance Details5.25% 30 years70 - 75% finance
This gets all or most of our cash back to do the next project.
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Maximum Flexibility
With the Refinance in place
we are not locked in to any option.
We can:
1. Rent It.
2. Lease-Option It
3. Sell It
The low appraisal makes it less likely we’ll sell it nowEspecially since it is renting for a healthy cash flow.
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The Planet
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CraigsList To Rent, Lease Or Sell
CraigsList has sections for Rentals and Sales.Both Work Well.
You must keep your ads separate
You’ll need membership
in a credit bureau or way to check
credit and rent history.
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Other Options:
1. We could have LOWERED THE PRICE and sold for cash.
Not totally out of the question but definitely not a first option.
We have found that people with “A” credit seem to
demand more price concessions. This is also more common when the property is
listed on MLS.
Oh,No!
Saving
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At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010
Benefits of BRRR #8
1. Cash Flow Positive (wife happy)2. If the R.E. Market goes up, I will
benefit from the increase.3. No Tax Consequences until the
property is sold.4. Low appraisal issue is pushed
into the future when it will probably become irrelevant.
5. Money available to Re-invest
6. Freedom to pursue Zero Energy with 3KW PV system