Real Estate Plan - Dallas 2009
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Transcript of Real Estate Plan - Dallas 2009
![Page 1: Real Estate Plan - Dallas 2009](https://reader036.fdocuments.us/reader036/viewer/2022062616/549238fdac7959222e8b4572/html5/thumbnails/1.jpg)
“The Company”
Secured
Hassle-Free
Superior Yields
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Agenda
The Program The Market Company Overview How it all comes together…
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The Program
We locate a property. We borrow from you for the purchase. We have a formal closing.
You receive a first position Deed of Trust & note. Title insurance with a mortgagee clause Hazard insurance naming the mortgagee
You share in the profits and depreciation
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Benefits to the Company
Availability of cash allows us to buy at a discount.
Availability of cash allows for quick closings.
Continued purchasing to build long-term value.
Banks don’t want to lend right now (build cash reserves).
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Benefits to Mark Cuban
Superior yields vs. CD’s, T-Bills, and money market
Superior stability vs. stock market Minimum 30% equity cushion Receives monthly payments per the terms of
the Note and Deed of Trust Is secured in first position Payoff occurs when the property is sold. Receives 10% of the net profit as properties are
sold.
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Benefits to the Community
Employ local tradesmen Rehabilitate “eye sore” houses Provide affordable housing Maintain local tax revenues with a
producing property
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The Market Foreclosures remain high More than 10 months of inventory * Existing home prices begin recovery
in 2009 * Prices are down 6% since 2007 + Financing for sub prime…disappeared Mortgage rates 5.5% (Wells Fargo)
* Business Week January 30, 2009+ Dallas Morning News January 27, 2009
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The Market – continued
Unemployment 8.3% by mid 2009 Recession until 3rd qtr 2009
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Yields
US Treasury – 30 Year 3.542% US Treasury – 10 Year 3.27% US Treasury – 5 Year 2.822% Dow Jones (^DJI) 10 Years 0.303% Dow Jones (^DJI) 40 Years 5.80% Vanguard (VWNDX) 5 Years -6.52% Fidelity (FFIDX) 5 Years -3.61%
Data from Bloomberg.com and yahoo.com 2/2/2009
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Yields for CD’s
Wells Fargo: 1year CD rate – 1.10% Bank of America: 5 yr CD rate – 2.08% Wamu: 5 yr CD rate – 1.54% Chase Bank: 5 yr CD rate – 2.5% Capital One: 7 yr CD rate – 4.0 %
As of January 30, 2009, from bank websites
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Company Overview
Buy at a significant discount Renovate Sell at market value Lease to tenants
Single familyDuplexesFour-plexes
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Success Factors
We have an established and documented formula.
Proprietary marketing plan locating motivated sellers (distressed)
What to buy and what not to buy Experienced in renovations Personal involvement Extensive management experience
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CompanyPrincipals
Jim L. MBA & BBA – Univ. of Memphis20 years business experience10 years real estateOver 200 real estate transactionsMarketing & Acquisitions
Bill K.BBA – Cal St. Northridge24 years business experience6 years real estateOver 120 real estate transactionsSales & Operations Management
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How does it all come together? Locate a property meeting our criteria
Maximum of 70% of value less repairs And/or price is 50-70 times monthly rent
Present property and plan to lender Desk top appraisal Repair estimate Projected rent or sale price
Formal closing with all documentation First position Real Estate Lien Note (Vendor’s Lien) First position Deed of Trust Title Insurance with Mortgagee’s Clause Hazard Insurance with Mortgagee’s Clause
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How Does It All Come Together?
Renovate the property Lease the property
Income 3 times greater than rent Deposit Verifications (employment & landlord) Public records check
Sell the property (5-7 years estimated) Calculate profit and pay owners
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Samples
The following slides are real properties that are currently in our inventory.
The purchase month and year are stated at the top.
The basic financials are listed to the right of the picture.
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Duplex – Jan 2009Dallas
2/1/1 – 2 units Brick
Price: 46,000
Repairs 5,000
Total 51,000
Value 88,000
LTV 58.0%
PITI 642.80
Rent 1,150.00
Cash Flow 507.20
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Single Family – Oct. 2008 Pleasant Grove
3/1/1 vinyl
Price 26,000
Repairs 7,000
Total 34,000
Value 60,000
LTV 56.7%
PITI 400.29
Rent 700.00
Cash Flow 299.71
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Single Family – Oct 2008Oak Cliff
2/1/1 & 2-cp, aluminum
Price 11,500
Repairs 6,000
Total 17,500
Value 45,000
LTV 38.9%
PITI 222.50
Rent 595.00
Cash Flow 372.50
![Page 20: Real Estate Plan - Dallas 2009](https://reader036.fdocuments.us/reader036/viewer/2022062616/549238fdac7959222e8b4572/html5/thumbnails/20.jpg)
Single Family – Aug 2008Dallas
3/1/1 Brick
Price 35,500
Repairs 4,000
Total 39,500
Value 75,000
LTV 52.7%
PITI 487.67
Rent 695
Cash Flow 207.33
![Page 21: Real Estate Plan - Dallas 2009](https://reader036.fdocuments.us/reader036/viewer/2022062616/549238fdac7959222e8b4572/html5/thumbnails/21.jpg)
Four-plex – Jun 2008Dallas
2/1 – 4 units Brick
Price 96,000
Repairs 2,500
Total 98,500
Value 150,000
LTV 65.7%
PITI 1,213.94
Rent 1,580.00
Cash Flow 366.06
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Single Family – Jun 2008Pleasant Grove
2/1 Frame
Price 21,000
Repairs 7,000
Total 28,000
Value 45,000
LTV 62.2%
PITI 333.56
Rent 595.00
Cash Flow 261.44
![Page 23: Real Estate Plan - Dallas 2009](https://reader036.fdocuments.us/reader036/viewer/2022062616/549238fdac7959222e8b4572/html5/thumbnails/23.jpg)
Tri-plex – May 2008Oak Cliff
2/1, 1/1, 1 bed studio
Price 26,000
Repairs 7,000
Total 33,000
Value 55,000
LTV 60%
PITI 400.96
Rent 1,145.00
Cash Flow 744.04
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Single Family – Apr 2008Dallas
3/2/2 Brick
Price 41,000
Repairs 7,000
Total 48,000
Value 80,000
LTV 60%
PITI 598.88
Rent 950.00
Cash Flow 351.12
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Single Family – Mar 2008Pleasant Grove
2/1/1 vinyl
Price 18,000
Repairs 9,000
Total 27,000
Value 50,000
LTV 54%
PITI 336.81
Rent 600
Cash Flow 263.19
![Page 26: Real Estate Plan - Dallas 2009](https://reader036.fdocuments.us/reader036/viewer/2022062616/549238fdac7959222e8b4572/html5/thumbnails/26.jpg)
Single Family – Mar 2008Grand Prairie
2/1/1 Frame
Price 10,000
Repairs 2,000
Total 12,000
Value 25,000
LTV 48%
PITI 168.09
Rent 300.00
Cash Flow 131.91
![Page 27: Real Estate Plan - Dallas 2009](https://reader036.fdocuments.us/reader036/viewer/2022062616/549238fdac7959222e8b4572/html5/thumbnails/27.jpg)
Duplex – Jan 2008Pleasant Grove
1/1/1 2 units
Price 32,000
Repairs 7,000
Total 39,000
Value 75,000
LTV 52.0%
PITI 482.89
Rent 745.00
Cash Flow 262.11
![Page 28: Real Estate Plan - Dallas 2009](https://reader036.fdocuments.us/reader036/viewer/2022062616/549238fdac7959222e8b4572/html5/thumbnails/28.jpg)
Single Family – Mar 2007Oak Cliff
2/1/1 Vinyl
Price 10,000
Repairs 5,000
Total 15,000
Value 35,000
LTV 42.9%
PITI 188.52
Rent 300
Cash Flow 111.48
![Page 29: Real Estate Plan - Dallas 2009](https://reader036.fdocuments.us/reader036/viewer/2022062616/549238fdac7959222e8b4572/html5/thumbnails/29.jpg)
Single Family – Oct 2007Richardson
3/2/2 BrickPrice 82,000Repairs 4,000Total 86,000Value 120,000LTV 71.7%
PITI 910.00Rent 1,100.00Cash Flow 190.00
Owner financed note
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Single Family – Oct 2006Garland
3/1/1-CP Frame
Price 22,000
Repairs 8,000
Total 30,000
Value 60,000
LTV 50%
PITI 434.37
Rent 625.00
Cash Flow 190.63
![Page 31: Real Estate Plan - Dallas 2009](https://reader036.fdocuments.us/reader036/viewer/2022062616/549238fdac7959222e8b4572/html5/thumbnails/31.jpg)
Single Family – Jun 2006Irving
3/1/1 Aluminum
Price 40,000
Repairs 2,000
Total 42,000
Value 78,000
LTV 53.8%
PITI 556.50
Rent 750.00
Cash Flow 193.50
![Page 32: Real Estate Plan - Dallas 2009](https://reader036.fdocuments.us/reader036/viewer/2022062616/549238fdac7959222e8b4572/html5/thumbnails/32.jpg)
Single Family – Sep 2005Oak Cliff
2/1 Vinyl
Price 12,000
Repairs 8,000
Total 20,000
Value 43,500
LTV 46.0%
PITI 267.39
Rent 600.00
Cash Flow 332.61
![Page 33: Real Estate Plan - Dallas 2009](https://reader036.fdocuments.us/reader036/viewer/2022062616/549238fdac7959222e8b4572/html5/thumbnails/33.jpg)
Single Family – May 2005Oak Cliff
2/1 Frame
Price 6,000
Repairs 2,000
Total 8,000
Value 25,000
LTV 32%
PITI 145.23
Rent 250.00
Cash Flow 104.77
![Page 34: Real Estate Plan - Dallas 2009](https://reader036.fdocuments.us/reader036/viewer/2022062616/549238fdac7959222e8b4572/html5/thumbnails/34.jpg)
Single Family – Feb 2008West Dallas
2/1 Frame
Price 8,000
Repairs 2,000
Total 10,000
Value 25,000
LTV 40%
PITI 137.87
Rent 250.00
Cash Flow 112.13
![Page 35: Real Estate Plan - Dallas 2009](https://reader036.fdocuments.us/reader036/viewer/2022062616/549238fdac7959222e8b4572/html5/thumbnails/35.jpg)
Single Family – Jan 2005Oak Cliff
2/1/1 Frame
Price 16,000
Repairs 5,000
Total 21,000
Value 40,000
LTV 52.5%
PITI 279.36
Rent 550.00
Cash Flow 270.36
![Page 36: Real Estate Plan - Dallas 2009](https://reader036.fdocuments.us/reader036/viewer/2022062616/549238fdac7959222e8b4572/html5/thumbnails/36.jpg)
Single Family – Nov 2004Irving
3/2/1 BrickPrice 82,000Repairs 4,000Total 86,000Value 109,000LTV 78.9%
PITI 865.92Rent 950.00Cash Flow 84.08
30-year loan