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Who is Vernon Vaughan?

A serial entrepreneur. Worked as a market researcher, while pursuing a degree in I.T. Started investing in 2003. Went “full time” in 2004 (quit my job after a 3 day weekend…). Who is Vernon Vaughan?.

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Who is Vernon Vaughan?

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  1. A serial entrepreneur. Worked as a market researcher, while pursuing a degree in I.T. Started investing in 2003. Went “full time” in 2004 (quit my job after a 3 day weekend…) Who is Vernon Vaughan? REI Success Brainwash

  2. Started wholesaling by accident, all because of 4103 Boarman Ave, Baltimore MD….a rehab where I bit off more than I could chew. Average 1 to 2 wholesale deals per month with $8,000 - $12,000 paydays each. Own a number of rental properties. Have sold off underperforming properties in the last couple of years. Who is Vernon Vaughan? REI Success Brainwash

  3. In the past, I’ve looked to rehab 4 properties a year (1 per quarter). Looking to increase that number..- There are more opportunities and less competition, than I have ever seen in my 8+ years as an investor. There is a need to be filled! There is money to be made. Who is Vernon Vaughan? REI Success Brainwash

  4. What is wholesaling ? Whereas, a retailer buys LOW and sells HIGH. A wholesaler buys VERY LOW and sells LOW ! REI Success Brainwash

  5. Wholesaling - Putting a property under contract and assigning your contract (or equitable interest) to another investor, for a PROFIT. What is wholesaling ? 9 times out of 10, the wholesaler isn’t doing ANY work to the property before assigning the contract (or equitable interest) ! REI Success Brainwash

  6. When dealing with non-assignable contracts (REOs), you write the contract in the name of an LLC and assign the LLC. What is wholesaling ? Any other time (unless stated otherwise), you can assign the contract. Sometimes, a wholesaler will actually close on the purchase of a property and resell it. (not preferable, can be expensive, USUALLY unnecessary) REI Success Brainwash

  7. MAXIMUM ALLOWABLE OFFER FORMULA What makes a deal ? MAO = 65% x ARV - Repairs MAO = 65% x $100,000 - $10,000 = $55,000 REI Success Brainwash

  8. MAO = 65% x $100,000 - $10,000 = $55,000 What makes a deal ? (Then, factor in desired wholesale profit)-$10,000 = $45,000 REI Success Brainwash

  9. BUT WAIT! It’s about much more than MAO! What makes a deal ? Give your SERIOUS BUYERS exactly what they want (location, type of neighborhood, size, # beds/bath, type of house, scope of work). Let your SERIOUS BUYERS determine where and even how you look for deals. REI Success Brainwash

  10. What makes a deal ? There are hundreds of “deals” in the MLS that are priced at or can be negotiated to 65% (or whatever) of ARV minus repairs.SO WHAT!!Concern yourself only with the types of deals that your SERIOUS buyers want! It makes life sooooo much easier…..and profitable. REI Success Brainwash

  11. REPAIRS - Break the house down in components.- Learn the price of common items (windows, doors, carpet, appliances, etc). Use HD or Lowe’s websites. - Always better to over estimate, than to underestimate. - Talk to experienced investors. - Take pictures and notes (plenty). What makes a deal ? REI Success Brainwash

  12. REPAIRS MOST IMPORTANTLYPay attention to Craig during Day #2 of the REI Success Brainwash. Hands on experience usually has the biggest positive impact on your level of knowledge and confidence. What makes a deal ? REI Success Brainwash

  13. Your profit isn’t limited to $5,000 or $10,000! Profit is determined by your ability to find and negotiate KILLER deals. What makes a deal ? REI Success Brainwash

  14. Why wholesale ? Why give up juicy deals, and sell for only a fraction of the total projected profit? - A low/no risk investment that is highly leveraged and PURE profit.- Quick cash (wholesale deal = 30 days –vs – rehab deal = 120+ days)- A way to capitalize on deals that don’t fit your criteria (location, price, amount of work needed, etc) REI Success Brainwash

  15. QUALITY – VS - QUANTITY I look for and negotiate KILLER deals. I stay away from o.k. deals and am deathly allergic to mediocre deals.I like deals with large spreads because:I would rather make $10,000 on 1 deal as opposed to needing to wholesale 3 deals at $3,300 each. Large spreads give me room to negotiate with my buyers. What makes a deal ? REI Success Brainwash

  16. How do I find Wholesale Deals ? Deal Sources - REO/Bank Owned - Distressed Homeowner - Probate/Inherited - Tired Landlords REI Success Brainwash

  17. REO/Bank Owned How do I find Wholesale Deals ? - My favorite!- Banks are so motivated! Speed is a MUST!- Emotion is removed from the equation! - Can find EXACTLY what your buyers want via MLS!- Can find deals on a $0 marketing budget! REI Success Brainwash

  18. Distressed Homeowners How do I find Wholesale Deals ? - Shortsales / Pre-foreclosure (some states have laws)- Bankruptcy/Tax Liens- Job Loss/Health Issues/Divorce/Downsizing/Relocation- Direct/Targeted mailing, word of mouth, Bandit Signs - Is seller motivated? Does seller have equity? REI Success Brainwash

  19. Probate/Inherited How do I find Wholesale Deals ? - I love inherited properties that are vacant!- Probates = less competition. Also, you get more time!- Adversarial attorneys & feuding siblings suck! - Can find by subscribing to probate list or court house REI Success Brainwash

  20. Tired Landlords How do I find Wholesale Deals ? - The Real Estate Investment Gold Rush created many!- They know the state of real estate market!- Emotion is removed from the equation!- Absentee owner, Craigs List, Expired listings, REIAs REI Success Brainwash

  21. Marketing Pre-requisites How do I find Buyers for my Wholesale Deals ? - Great deals is key is to finding buyers! - QUALITY of buyers > QUANTITY of buyers!- Power of word of mouth/networking is underestimated- Full service wholesalers have an edge- Use technology to your advantage. REI Success Brainwash

  22. Offline How do I find Buyers for my Wholesale Deals ? - REIA’s/Meet Ups- Network = Net Worth (Agents, Lenders, Contractor, Etc)- Bandit Signs (Discount Houses 4 Sale)- Direct mail to cash buyers found via MLS or list service- Classified Ads/Print Ads/Flyers REI Success Brainwash

  23. Online How do I find Buyers for my Wholesale Deals ? - Forums (i.e. virtual REIA’s)- Free/Paid classified advertising sites- Web Site/Squeeze Page (SEO)- Answer/Question sites- MyHouseDeals.com, Trulia.com, Zillow.com, etc REI Success Brainwash

  24. Always A.B.M Be Marketing REI Success Brainwash

  25. Fort Washington, MD • Built in 2009- 90% finished- Nearly 3,000 sq ft- 6 Bed/6.5 bathroom- 0.67 acre lot Killer Deals • Listed for $225k. Offer of $155k accepted on 2/8/11. - Wholesaled to cash buyer via the phone for $165k while in front of the property! I will also make a 3% commission.- Appraised at $347k on 2/11/11 ! Recent comps easily support it. - Repairs of $45k. REI Success Brainwash

  26. Anatomy of a Deal 612 62nd Pl, Capital Heights, MD 20743 REI Success Brainwash

  27. 7/30/10 – Saw listed on the MLS for $59,900 Anatomy of a Deal REI Success Brainwash

  28. 7/30/10 – Researched property • Had been listed on MLS for 109 days. Price had just been reduced from $85,900 to $59,900- Was listed as a 4 bedroom/2 bath rambler- MLS picture revealed a 2nd house on property, while listing didn’t mention 2nd house at all - Researched previous listings and determined it had been recently renovated and did in fact have a guest house in the rear of the property Anatomy of a Deal REI Success Brainwash

  29. 7/30/10 - Determined after repair value of $180,000 Anatomy of a Deal REI Success Brainwash

  30. 7/31/10 – Went to take a look IMMEDIATELY! Anatomy of a Deal REI Success Brainwash

  31. 7/31/2010 – determined repairs of $34,375 Anatomy of a Deal REI Success Brainwash

  32. 8/2/10 – Submitted $60,000 offer Anatomy of a Deal REI Success Brainwash

  33. 8/2/10 – Pre-marketed to CASH buyers list Anatomy of a Deal $73,500 REI Success Brainwash

  34. 8/3/10 – Offer accepted! Anatomy of a Deal REI Success Brainwash

  35. 8/3/10 – Full marketing blast (list & online) Anatomy of a Deal $73,500 REI Success Brainwash

  36. 8/5/10 – Found buyer @ $69,500 Anatomy of a Deal REI Success Brainwash

  37. 8/19/10 – Set up LLC Anatomy of a Deal REI Success Brainwash

  38. 8/27/10 – Settlement day! Made a $9,500 profit! Anatomy of a Deal REI Success Brainwash

  39. TALE OF THE TAPEProfit: $9,500.00 Duration: 29 days Credit Requirements: N/A Cash Invested: $0 Hours Invested: 7.5 Profit Per Hour: $1,266 Projected Net Rehab Profit: $56,000 (incl. debt service) Projected Net Monthly Cash flow: $675 (incl. debt service) Anatomy of a Deal REI Success Brainwash

  40. As you meet your cash needs (monthly overhead) you are able to be patient and don’t require $10,000 every month. Instead you can wait 4 months to make $40,000. That is 3 less deals that you had to do (locate deal, negotiate deal, find buyer, control deal) to make the same amount of money.Wholesaling gives you a great opportunity to sharpen your skills in locating and evaluating deals and prepare you for the transition to rehabbing. Transitioning to Rehabbing REI Success Brainwash

  41. 5212 Kenmont Rd, Oxon Hill, MD Transitioning to Rehabbing • Purchased for $33,000 in 11/2010 from private seller- Rehab budget of $50,000. Only spent $37,000 - Should hit the market on 5/15/11 @ $130,000 REI Success Brainwash

  42. A side effect of consistently making your buyers rich by bringing them good deals is that you can bring up the idea of joint venturing on deals.…..and by joint venturing, I mean having them put up ALL of the money and you do what you do best, locate the deal and manage the rehab. Then, split the profit.There are buyers out there that are long on money, but short on time. This can present a huge opportunity to you as you prove yourself to be a “rain maker”. Turning Your Buyers Into Partners REI Success Brainwash

  43. Waco Dr, Upper Marlboro, MD Turning Your Buyers Into Partners • HUD Foreclosure purchased for $110,000 on 4/22/11- Was listed for $230,000. - $28,500 repair budget (90% cosmetics)- $235,000 after repair value REI Success Brainwash

  44. - Wholesaling is great for new & experienced investors.- Wholesaling is highly leveraged, almost pure profit. - Learn MAO. Great Deals Sell!- Know EXACTLY what your buyers are looking for! And deliver it to them. - The deals are out there, the buyers are out there.- A.B.M (Always Be Marketing)- REO/Bank Owned is A source, not the ONLY source. Look for motivation. Recap REI Success Brainwash

  45. - Wholesaling is a great way to sharpen your skills as a deal finder. - Develop a reputation for finding and delivering killer deals and the options are endless. There are buyers who will gladly take you on as a partner and fund the deals you find. - When the time is right (and if it fits into your goals), transition into rehabbing or at least make it part of your plan to build wealth. Recap REI Success Brainwash

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