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Closed on 7 Unit in Las Vegas

I was very hesitant to speak of this too much until the due diligence was completed and escrow had closed.  On November 3, all that happened and I now own this 7-unit apartment building in Las Vegas.

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Its a great deal for myself.  The essential details are the purchase price is $200,000, seller is carrying back with $27,500 down, at 6.5% interest only for 3 years, plus option to extend for fourth year.  Fixup costs are $14,600.  Net operating income will be $23,756 w/ 10% vacancy factor.  Its a 30%+ cash on cash return based on cash flow after debt service.

Also, I have submitted purchase offers on 3 more residential multi-family properties - also in Las Vegas.  Two of them, will net about $10,000 each on a flip strategy.  Each will offered at better than 10% capitalization rate to the new purchasers. 

Third property that interests me is a foreclosed tri-plex that the listing price was $40,000 - that's for WHOLE building, NOT per unit.  (I clarify because if you live on the west coast like I do, I know its hard to comprehend prices like that)  Estimated fixup costs are $9,000.  Listing agent said rents are $500/unit/month, so based on that net operating income is $9,580 w/ 10% vacancy factor.  That's a 19.5% capitalization rate AND if buying with cash means for $49,000 would own fixed up 3-plex free and clear with NO mortgage to cover, NO debt service.  However... if my offer is accepted, my strategy for this property is to buy, rehab, get rented out, then resell as a "performing, all ready to go investment property" in 4 months (or so) at $70,000, or a 13.7% capitalization rate. 

These properties are a win/win scenario for all parties involved - whether the new buyer is a rehabber, or is looking for a turnkey property with an annual return of well over 10%.  I live in Portland, Oregon so I dare anyone to find close to a 10% capitalization rate here.  Last check, MLS listing prices on duplexes in Portland, Oregon start at about $100,000 per unit ($200,000 each) so good luck getting that to cashflow.

The three latest properties I submitted offers on, I found myself - by the way. I look thru listings every day and find residential multi-family properties with LIST PRICES of $25,000/unit or less.  Are you interested?  Of course you are.  If you call yourself a real estate investor and $25,000 per unit cashflow properties of 10%+ cash on cash returns doesn't EXCITE you, then let's be honest, you're not a serious investor but just a penny wetter.

I will be flipping residential multi-unit properties at 10%+ capitalization rates just for a short while - until I build up my own cash reserves and credit rating from recorded income.  My ultimate strategy is to keep my properties by refinancing after raising the value by rehabbing and renting out.  So if YOU are interested in getting a 10%+ return on your money and have either access to cash, or can qualify for traditional financing (mortgage), take advantage of this opportunity by getting in touch with me while I will be reselling.  Either SIGN UP for the Decisive Newsletter using the form at the bottom of this page, or contact me by contact details at bottom of right sidebar.

Las Vegas in October

I went back to Las Vegas in October to visit a property I'm putting under contract.  As I was in town anyways, Jason Jones invited me to come along for his October mentoring, so I did.

I was in Las Vegas previously for Jason's September mentoring (see past entry below) and for that I was all business.  Coming back, I decided I deserved to enjoy myself a bit for the work that I've done.  So I rented a car for the first two days I was there when I was on my own.

The first night, I stayed at the Four Queens on Fremont Street in downtown Las Vegas.

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On my first night, I saw an amazing light show on Fremont Street that was a tribute to Queen.  See my photos.

I went around with Bruce the property inspector I hired to look at my apartment building.  Bruce was nice enough to point some things out to me during the process.  Also, I scheduled a meeting with Zeke a contractor to get an estimated bid on the fixup.  Both of them were very nice people.

The group during Jason's and Joe's 3-day was half the size as last months.  I'm not going to repeat what it was all about.  You can read my past Entry if you wish to hear more about the details.

Jason introduced me to Brent, whom I shared a room with to help save on my room costs.  Brent sure has a laugh loud enough to rattle my cages, but he's a genuine guy.

After the 3-day was over, Brent and I stayed a couple extra nights to go to that month's Prosper Real Estate Club meeting held by Jason and his wife, Debbie.  It was really nice to meet Jason's wife, Debbie and to have dinner with them both.

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The tablecloth is so pleased, its smiling!!

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Jason, Brent, and myself in the Prosperity Garden.

Prior to going to Las Vegas for the second time, I found a 4-plex on the internet that interested me that I drove by while I had my rental car before the 3-day.  Coincidently, that 4-plex would be one of the properties that we would visit on the tour, so naturally that would be a buliding I would submit a LOI on.

Jason Jones & Joe Varnadore Las Vegas Property Tour & Analysis

I am back from the Property Tour & Analysis in Las Vegas hosted by Jason Jones and Joe Varnadore.  Jason Jones is a real estate investor and instructor based out of Las Vegas, whose wife Debbie runs Prosper Investments, a real estate investment club with meetings in Las Vegas and Los Angeles.  Joe Varnadore is a real estate investor and instructor based out of South Florida. 

I had an excellent time.  I felt like I was on Gilligan's Island, (in a good way) as the small mix of people (14?) was very eclectic yet everyone was very friendly and we all connected very well.  This trip was different than other business trips/trainings I've been to.  Jason and Joe requested that we all stay at the same hotel, which ended up working out very well as many of us met up together to visit and hang out on our own.

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On the morning of the first day, I spent some time to get my self psyched up and make sure my energy was right.  If anyone was staying next door, they might wondering why all the hollering and crazy noises.

Each morning started out with the group meeting at the breakfast buffet each morning to bond and discuss the day ahead with each other.  Being a casino buffet, the food was of course very excellent.

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The mini potato pancakes were very cute!

Other trainings and events tend to be in large hotel conference rooms where I may find a connection to a handful of other participants, I may or may not have a chance to talk privately with the speakers or staff members there.  With this, everyone was on the same level with Jason and Joe.  With three days and such a small group, we all had time to connect privately with Jason and Joe, and also with each other.  And unlike other trainings, where you are given a workbook of some kind and then ultimately have to go out and take steps on your own - with this, the event is designed around submitting offers there with Jason and Joe, so each of us would get that experience right away.

Having been to so many other trainings and reading and going thru so many courses over the last year and a half, I very much appreciated that very little time was taken out to refresh over the fundamentals of real estate investing.  More or less, we would go straight into things presuming that we did at least know the basics.  A couple of the attendents I knew was their first time going to any kind of real estate event of any kind, so I hope that they did not take the time at this event for granted thinking that every real estate training course is just like this - because other classes are not like this.  I believe the downside of having this be your first real estate training taken, a person could take the content for granted not realizing how great of an opportunity this was from not having the perspective of taking many other classes, some which would ultimately turn out to be disappointing and/or with no direct results to show from them.

The event consisted of three days.  On the first day, Jason and Joe took us all in a van to drive by various properties listed - mostly multifamily - that looked attractive to make offers on.   The second day, we would meet at a meeting room in a restaurant to analyse each property and see what numbers would work to submit an offer on.  The third day, we'd go back to the meeting room and decide which of us would want to make an offer on which property.  Jason and Joe also provided an LOI template for us to edit and write up the LOI ourselves to submit right away.  One of the attendents, Eric Lynn happened to be a broker in Las Vegas, so lucky for us (and him) that we were able to use him as our buyer's agent to submit the offers on our behalf.

On the last day, each of us would find a property to submit an offer on.  Each of us had different resources.  For those of us with access to some capital, we would be able to submit offers with the intent to buy for ourselves.  For those of us with little or no access to capital, Jason and Joe have a transactional funding program we can use in order get the short term funds needed to get a REO or distressed property priced at wholesale under contract in order to flip or assign to a new buyer.  Some of the attendents would partner to combine their resources.  It was nice that no matter what your situation was, everyone would have a property to submit and offer on and a way to get started - as anyone who's getting started in real estate investing and has gotten past the first step of getting out there and making the calls, the most common barrier for most new investors trying to complete their first deal done is access to capital.

On the evening of the third day happened to be when Jason's REIC had a meeting, so I planned to stay an extra night and fly back the night after to go to the meeting.

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The meetings were held in a non-denominational church and wellness center, which to me is VERY cool because I am a very inspired type person.  Going to the meeting really made me feel like I got to know Jason and Joe a lot more seeing them in their setting.

Anyone I've talked to about real estate investing, also knows about Jason.  As I was telling my investor friends about the trip, they would say, "oh yeah, I remember you telling me about Jason".  And if you read my entry before the trip, you would see this trip meant a lot to me.

Ultimately, I would submit LOI's on two properties with no partners and the intention to hold.  From there, I will see if things work out.  As much as I'd like to say this is the best business trip I've been on, well... if anything in Las Vegas closes then I will say that.  When it comes to business, I no longer go on trips just to feel good or for the learning experience.  If what I am going to is not going to directly result in submitting offers, I'm at the point that I really know enough and I'm really not interested in that.

I will say that on a personal note - this trip was special to me and was very fulfilling to me personally and in my growth in business and emotional self esteem.  I think that being in Las Vegas definately made the trip more interesting with some things on the side that might not have happened if the location was just any other regular city.  So many things happening on the side, not related to real estate, that I found to be very interesting and funny for being on a business trip.  It really was like being on Gilligan's Island, it was a 3 day tour.  I'd say Joe was the Skipper.

If someone is interested in just learning the fundamentals of commercial real estate, but doesn't feel ready to step out in the field and make calls, then they should take the Institute of Commercial Real Estate class or Introduction to Commercial Investment Real Estate Analysis thru CCIM.  If someone is ready and hungry to get out there and submit commercial offers, then they should definately sign up to go to Jason and Joe's next 3-day commercial property tour.

PS~  See some more Las Vegas picks on my FaceBook page (and why not add me as a friend while you're there!)

PPS~ I have heard friends tell me of their interest in this program after reading my entry.  Should you like more information on the next Las Vegas Property Tour that Jason and Joe do, you are welcome to contact me and I will forward you Jason's and Joe's contact info to talk to them for further details.  bmoy@decisiveinvestments.com / 971-222-8326

Jason Aro Mastermind Weekend

I was just at the Jason Aro Mastermind Weekend today and yesterday, and I feel very pleased that I decided to go!

Jason Aro is a real estate attorney who is an experienced investor, builder, and professional consultant.  Jason founded a couple of companies, South Bay Foreclosure Specialists and South Bay Capital - which are focused on investing in distressed properties thru short sales, REO's, loan modifications, and buying non-performing notes.

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I found out about Jason from the presentation he gave at the March general meeting at North West Real Estate Investors Association.  I was just starting to do research on REO's, so when I heard someone was talking about that, that was my main interest.  I've had a passive interest in notes for a while, but I've put that off, not really seeing how it would relate to what I was doing.  I sat front row (mainly because I am short-sighted) and was impressed right away by Jason's "no nonsense" way of explaining things clearly in detail. 

The points Jason brought up in his presentation that stood out to me:

  1. Nothing else would need to be purchased to get started the very next day.  (I always appreciate when a program is self contained, without requiring the purchase of an upsell for the people who are actually "serious" to get the real content.)
  2. Jason's company pays referral fees to do loan modifications and short sales for distressed homeowners.  Nice option to keep in mind, and also to know he owns a company with a staff doing what he's teaching.
  3. The class would teach how to negotiate with banks, being credible and using proper terminology to get access to REO's and non-performing notes directly thru them.  (with my new interest in REO's, sounded like exactly what I was looking for)

Initially I actually was not planning to attend - only because I wasn't intending to do any more trainings for right now.  I visited the South Bay Capital website and there I came across the Join Our Team link, offering openings as Independent Contractors to work with the company.  So, I called their office directly to talk about that - ends up, it is an option available to those that take Jason's Mastermind Training.  Basically that made me interested to go as I am especially interested in any potential partnership opportunities.

This class was actually significant to me for the reason that being that it was in Portland and promoted thru NWREIA that I'd attended.  I was thinking it would probably be a great chance to be at a training to introduce myself to local NWREIA regulars regulars and investors in attendence - which is very important to me. 

I spoke to Jason a little bit at the start and he knew that I'd registered on the website to see a new video lesson they'd just put up - and also that I'd called Neil at the office to talk about things.  Its always nice when someone sort of knows about you.

The class size was one of the smaller ones I've been to - 17 attendents.  Jason didn't even wear a microphone and the layout was a conference room where we all faced each other.  If you can picture that, the class setting was like a group meeting.  People would often have questions or comments, and Jason would always let people talk, and respond quickly on the spot.  The format made it so that I was able to get a lot of good info from questions that attendents would bring up that wasn't specifically covered in a lesson.

During lunch, Jason even came out and bought lunch with us.  He's a very approachable and easy person to talk to.  With less than 20 attendents, I think everyone had the opportunity to have personal chat time with Jason. 

The style and content was excellent and although detailed, easy to process.  I did appreciate that the first day wasn't wasted going over "you can do it" exercises and basic real estate fundamentals, and going straight into "how to" and "what to" content.  Between the class materials, all the necessary forms, marketing materials, business outlines, and scripts were included to get out there right away for a person motivated to do so.

I made some excellent connections that I will be in touch with.  I sensed most of the attendents appeared to be serious and decisive in using what was learned to build their business.  I am determined to take what I learned to use in my business in March and April.

Post Masters Syndication

I had a wonderful weekend in San Jose last weekend for the Institute of Commercial Real Estate Masters Syndication training.  Being close to San Francisco, I went up to the city on Friday to enjoy myself.  All work and no play makes Brian a dull boy.  [Read about my day in San Francisco (with pictures!)]

The Masters Syndication class was the next two days.  I really tried to prepare myself by reading Principles of Real Estate Syndication by Samuel K. Freshman before I came.  I actually managed to get thru the entire book in three weeks (I finished reading the day before my flight!) as its so important for me to be prepared for anything.  I don't like to struggle with beginning concepts and terminology, so I tried my best to really study all that stuff so I can pay attention to more advanced things.  For me, its always easier to hear things thru a second time if I know its going to be hard the first time around. 

The Principles of Real Estate Syndication book was a very dry read and written from a legal point of view, but I committed myself to reading it as studying syndication was basically my top priority in February leading up to the training.  Everything else in my life was secondary for the time.  I feel my strategy of preparing was a success.  I've been to classes before where I was not prepared, and I feel very tight and overwhelmed as it goes on.  I felt very comfortable at this class, able to pay attention to the details.  Much of what was said in the beginning and on the first day, I remember reading before, but if its familiar or gets boring, that's okay because it means I understand it.

When I go to any seminar, I make it a point to be the first or one of the first people in the room.  I said hi to Cherif Medawar both mornings and chatted with him a bit.  I saw Cherif speak around seven years ago for a MSI class with the Robert Allen Institute when I was much younger.  Cherif was teaching stocks and the Wizetrade software at the time.  Back then, I was painfully shy so I didn't have the nerve back then to approach Cherif or any of the instructors there.  (thank goodness I'm over that!)  To finally have the chance to tell my story to a man I have a lot of personal respect for, and has been the biggest influence to me in deciding to getting into commercial real estate, I feel really brings some closure to the part of my life when I didn't have the self-confidence to do the things that I'm capable of doing today.

The staff member I felt that I connected with most was Ashlee, the organizer for ICRE.  She was very thoughtful to me (and charismatic!) and even let me take a look at Gene Trowbridge's book on Syndication.  Gene was my instructor for the CCIM Introduction to Commercial Real Estate Analysis class I took last year, so I was interested to look thru his book. 

During breaks, I really tried my best to meet people.  I'm the kind of person that tries to be broadly informed, so I can connect to any person on any subject.  A social weakness that I know that I have is that its hard for me to approach people that don't seem to be interested in talking to me, or I sense are taking me for granted. 

One thing that surprised me is how most of the attendents in the class were local to the area.  When introducing myself, many were surprised to see I came from Portland to come to this.  I was surprised there wasn't more people that came out-of-state to be at the training.

Eddie Hason was one of the speakers there.  It was nice to see him again as he was one of the instructors I met at the first ICRE class (and first class I had taken on commercial real estate) I took in Portland, OR.  Eddie is very direct about things, and he's not the kind of person to tell you things just because its probably what you'd want to hear - which to me, I appreciate.  Also I'd met him before in Portland, I have grown very much as a person since he saw me last so I was very happy to tell him how I have progressed since then. 

Nyle Mameesh is a hard money lender that spoke at the class.  He was soft spoken and easy to talk to.

Jessica, the assistant with ICRE was very considerate to me as well.  I'm the kind of person that is not afraid to ask any question I have - so I usually ask more questions than most people.  She was really friendly and nice to talk to.

I'm glad I was able to go to the first Masters Syndication class that Cherif was teaching.  I really did want to go to the very first class, and also I'd rather be in most places than in Los Angeles (location of the other Masters Syndication class), if possible.

From here, I feel I have a solid outline on how to go from here.  I already know how to find deals, talk to sellers, and submit offers - from doing them.  The missing piece for me was being able to find non-qualified (not dependent on my personal credit) financing for larger deals. 

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