There were only 3 jackknifed semis on the drive from Kamloops to Calgary yesterday…
Why on earth was I on this highway instead of being with my family?
Well, I was fortunate enough to get my wife’s permission to attend today’s REIN event in Calgary!
After a harrowing journey, I was well rested after a great night in Airdrie, so thank you to my cousin Cody and his lovely wife Lissa for the awesome hospitality 🙂
The day consisted of an economic update(macro economics) with a focus on oil, then a detailed how-to for the rest of the day. Topics included finding property, determining after-reno value, determine reno cost, presenting offers, financing, an expert panel, renovation contractor presentation, a case study(successful investor talking about their deals), and reno work in detail.
REFLECTING ON OIL
The event started off with Don Campbell giving his “What’s behind the curtain” and his take on recent low oil prices.
Basically this is a cycle that has happened before, this will hurt if a $50/barrel price is SUSTAINED, and Alberta will be a buying opportunity for a strategic real estate investor. Don plans to buy light industrial and residential near LRT in 2015. He points to Jan Stuart’s prediction that oil will recover($70 range) in 4th quarter of this year.
JARED HOPE’S WAY FOR RENOVATION
The main presenter was Jared Hope. He is conducting a massive expansion of his portfolio and has incorporated “flipping” into his business model. Jared’s impressive resume:
– $1.7M in recent renovation expenses
-managing 400 doors(Landlord Resource Centre)
-owns 140 doors with partners
– writes an offer a week and closes on a property every three weeks
The first segment was about choosing a business model. You need to decide:
1. Reno then flip: great quick cash injection.(common on TV) You need to know who you are selling to.
2. Reno then rent: less common, can get into rental properties for less(due to refinance from improving the property) and less maintenance costs during your holding period.
3. What city will you do your flips in? It’s easier to do flips when you live there to stay on top of the trades.
4. What type of property? The numbers will dictate this.
“PLAN B” IF YOUR FLIP DOESNT SELL…
Spend more money(slush fund), rent it out, change your target buyer, change marketing efforts, etc. There are lots of plan B’s, and most are covered in REIN’s monthly meetings and extensive ACRE event so I won’t go into a great amount of detail here.
The rest of the event was information that runs parallel to traditional buy-and-hold, but it was a nice refresh of best practices.
“AH HA MOMENTS”
Some cool tips from this event that will improve my business include:
-Present deals in person, this will create emotion and allow you “humanize” the transaction. If the seller refuses, go find another deal. “Give people what they need, not what they want.”
– submit 2 offers: lower price + quick close OR higher price and long close(seller must choose ONE)
– when renovating, do showings as soon as the paint dries. You don’t need your flooring installed, but have samples of it on site. If you do showings before the walls are painted, tenants have a poor imagination and will think the place will not be finished.
– there is a substantial amount of risks doing “flips” so make sure there is at least $50,000 profit before proceeding(single family residential homes)
This was a great event jampacked with information from people who are actually doing flips now. With the checklists provided and systems that were taught, a significant amount of risk can be eliminated. This course makes flips a palatable business model, and the contents of today’s workshop would easily be worth $1000 as a home study course.
Just by using these checklists, I will avoid some of the mistakes from my last renovation, and my next one will be more profitable.
As usual, REIN put on another great event and I am so fortunate to have this included as part of my membership.
Now I can’t wait to get home to my wife and kids, I will be sure to drive slowly 🙂
Until next time,
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