PRE Strategies™

fb-cover-4710-58201b8d96738.jpg

PRE: PURCHASE REHAB EXIT

Saturating the United States and even bleeding into adjacent countries is the “fix and flip” business model. It is sexy, and everyone and their dog wants to be apart of it. There has been a negative stigma to the Flip verbiage with banks, asset managers, and some sellers. Let’s define the real model: PRE Strategies

Purchase:

Purchase strategies for real estate investing are many. As cliché as the statement is, you make money when you buy properties. If you improperly project at the acquisition stages of a deal’s repaired value or construction needs or their costs, you will be buying incorrectly. The investment will run the huge risk of losing money. Analyzing the deal: We need to be absolutely confident that we account for every necessary part of the deal. Put it all together and make the Purchase: taxes, maintenance, utilities, construction, insurance, multiple exits, cost of leveraging, acquisition costs. Projecting the most accurate timelines is critical.

Professionals used for Purchase:

  • Real estate agents
  • Bank Asset managers
  • Wholesalers
  • REO / Foreclosure
  • Short Sale
  • Direct Seller
  • Title and Closing Attorneys
  • Escrow Officers
  • Appraisers
  • Inspectors
  • General Contractors, making every effort to calculate a realistic construction budget.

Rehab:

Putting the teams together to correct value on a distressed brick and mortar asset is pivotal. These are the players meant to complete your valuable final product. Allocating the right amount of money and time to do this is essential. Too much or too little invested to rehab the project can kill a deal’s profit. Rehab in its simplest description is a thing, especially a building, that has been rehabilitated or restored. Taking something distressed and “un stressing” it contributes value increases not just for those investing money for the project, but also for those that will consume the product; the end dweller or end user.

Professionals used for Rehab:

  • General Contractors
  • Sub-Contractors and Tradesman
  • Handymen
  • Architects
  • Engineers
  • Municipality Departments
  • Inspectors
  • Consultants
  • Designers

Exit:

Many exit strategies: selling to a consumer, selling to an investor, seller finance, carry the note, lease option, refinance, occupy with renter. Generating the right returns is the goal while creating the specific plan for an individual project. The Exit of a project is the true realization of profits and returns. Real estate deals change and transition daily with anomalies not projected correctly or unforeseen. Going in the acquisition with the projected end in mind, or multiple exit potentials, will benefit the business, relieve the stresses of a deal, give peace of mind, and mitigate loss.

Professionals used for Exit:

  • Real Estate Agents
  • Auction
  • 5 Day Sales Consultant
  • Marketing
  • Stagers
  • Appraisers
  • Banks and Lenders
  • Title and Closing Attorneys
  • Escrow Officers
  • CPA and Tax representative / IRS Methodology

As shown above, real estate investing has many moving parts. Critical thinking is an important piece to a real estate firm. Most distressed assets I have come across, purchased, rehabbed, and exited, or applied successfully the PRE Strategies, have been assets that others do not want to endeavor. We become problem solvers in the industry, problem solvers with a big pay check at the end of the Exit, although, we really make money when we buy right!

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s