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This rating is based on the percentage difference between list value and my estimated value.
List Price |
This is what you will find listed publicly. It is not necessarily what the property will sell for. |
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Bank Owned |
As of 9/25/08, 90% of these are being sold at about 5% above list. My investors that pursue these typically make 10 offers a week to cose 1 deal in a month. Tip: Since most banks require you to get qualified through them, I recommend using my mortgage broker to get qualified through Country Wide. They have the most inventory and we can just bid on Country Wide REOs to prevent credit damage. |
Non-Bank Owned |
These are being sold at about 5% BELOW list. My investors that pursue these typically make 2 offers a week to cose 1 deal in a month. Tip: Pay cash and close in 15 days to squeeze another 5% out of the property. |
Short Sales |
These are a massive waste of time unless a property has already been "Pre-approved." I charge a non-refunable fee of $500 for EACH "Un-approved" property you want to submit an offer on. |
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Estimated Value |
This is a combination of my experience and comparibles. |
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This rating is based on the income potential and list price.
Rent Cash Flow |
Here are the factors used to calculate rent cash flow. |
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Rental Income |
I have 20 years of property mangement experience and "move" about 4 properties a week. Properties that have not been surveyed are probably off by about $100 as the condition of the property can't be done by desktop. |
Mortgage Cost |
There are so many factors that are involved here that I use a rule of thumb of $800 per $100k of home. My investors are usually happy that I inflated this value a little bit. |
HOA Fees |
This is the dollar amount listed publicly. It's rarely innacurate. |
Taxes |
This is the dollar amount listed publicly. It's rarely innacurate. |
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Here are factors not used in estimating cash flow. |
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Management Expenses |
I deliberately left this out because some folks like to manage their own stuff. Generally speaking companies charge about 8% of gross income + 10% of managing repairs. I charge 10% income + 10% of managing repairs because I can and just don't care if you use someone else. |
Vacancy |
Some investors make a mistake of holding out for high rents. My philosophy is get someone in there tomorrow who is qualified. I will give you my recommendations but its up to you to decide what a property is posted at. |
Repairs & Maintenance |
There is no way to effectively estimate this until a property is formally inspected by a licensed inspector. |
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Lease/Option Cash Flow |
First of all you need to understand that lease/options may not be your cup of tea. You have to have guts and know that you could potentially lose money in a lease/option. If you really want to know more about lease/options, please go here: FAQs about lease/options. Investors who do not read that page often lose 2-8 mortgage payments! |
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Rental Income + Option Premiums |
All my properties are lease/optioned. Generally, I get a $300 to $800 premium over rent with a lease/option. I network with all the lease/option specialists in Las Vegas and we move 4-8 properties a week during the summer. |
Mortgage Cost |
There are so many factors that are involved here that I use a rule of thumb of $800 per $100k of home. |
HOA Fees |
This is the dollar amount listed publicly. It's rarely innacurate. |
Taxes |
This is the dollar amount listed publicly. It's rarely innacurate. |
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Here are factors not used in estimating cash flow. |
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Management Expenses |
In a lease/option, money goes directly to you or to an escrow account. There are no management expenses unless you really want me to charge you 10% to hold your money. Investors who use me to lease/option their property get free eviction services. |
Vacancy |
Some investors make a mistake of holding out for high rents. Be reasonable and you will make money faster. |
Repairs & Maintenance |
Buyer/tenants pay the first $500 in repairs. Generally speaking, this cost is nearly zero for new properties. |
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Desire Ratings
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This is the most controversial of my ratings. This rating is based on ownership pride in the neighborhood. Also, properties that are on a busy street have a negative impact on desire of the home. |
Condition Ratings
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Generally, a property in A condition means less than $1000 in rehab costs. A property in F condition needs more than $20k in repairs. |
Square Footage Ratings
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This is the only rating that isn't an opinion. |
