Tony Alvarez 1 Presented By © Copyright Tony Alvarez 2012.

Tony Alvarez

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Pull the Trigger!

How to Begin or Grow your Real Estate Investing

Career in 2012

Presented By

© Copyright Tony Alvarez 2012

Copyright © 2012 by The REO Mentor

All rights reserved. No portion of this presentation/outline may be

reproduced, stored in a retrieval system, or transmitted in any form or

by any means – electronic, mechanical, photocopy, recording, scanning, or

other, without the prior written permission of the presenter/publisher.

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This presentation/publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is offered with the understanding that the presenter/publisher is not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is requite, the services of a competent professional person should be sought.

Adopted from the Declaration of Principles jointly adopted by a committee of the American Bar

Association and a Committee of Publishers and Associations.

Disclaimer3


Today’s TopicsTypes of Real Estate

Methods of Investing

How to Identify Your Role in Real Estate

Choosing Your Entry Point

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Things I Know to be True!


I hate Disneyland! 5


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You are HERE© Copyright Tony Alvarez 2012

Types of Real Estate

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Types of Real Estate Residential (SFR, Condo, Multi [2-4 or 5+], Mobile, etc.)

Commercial (office, retail, hotels, etc.)

Industrial (manufacturing, warehouse, etc.)

Vacant Land (raw land, finished lots, etc.)

Agricultural (farms, ranches, orchards, etc.)

Special Use (hospital, retirement comm., parking lot, RV parks, mobile home park, marinas, etc.)

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Apartments

Condos

Duplexes

Houseboats

Toll Roads

FreewaysJails

Prisons

1-4 Units

Co-op

Airports

Air Space

Beaches

Golf CoursesCountry Clubs

Schools

Sports ArenasTheme Parks

Entertainment Venues

Libraries

Retail ShopsCampgrounds

Mineral Rights

Nuclear Plants

Nature Trails

RV Parks

Fairgrounds

Age RestrictedTrailer Parks

Mobilehome Parks

T.V Antennas Cell Phone Towers

Medical Buildings

Hospitals

Stadiums

Churches

Warehouses

Factories

REITS

Halfway House

Discounted NotesManufactured

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SFR

Motels

Marinas

The Possibilities

are ENDLESS!


Methods of Investing

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Different Methods of Investing11

Active

Passive

Direct

Indirect

Short-termLong-term

Fast Cash

Cash Flow

Appreciation

Depreciation

IRA

Roth

Individually

Entity

LLC

C-Corporation

Sub-Chapter S Corp.

Land TrustIrrevocable Family Trust

Limited Partnership

General Partnership

Charity Remainder Trust

Tax Shelter Asset Protection Entity

Bird Dogging

Seller Finance

Creative InvestingLease Option

Sandwich Lease Option

Short SalePre-foreclosure

Wholesaling

Hard Money Lenders

Tax Liens

Tax Lien StateTax Deed State

Flipping

Land Trust REITs

Paper

NotesMortgage Investing

Selection is OVERWHELMI

NG!© Copyright Tony Alvarez 2012

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“Being Like Soros in Buying Farmland Reaps Annual Gains of 16%”

http://www.bloomberg.com/news/print/2011-08-10/being-like-soros-in-buying-farm-land-lets-investors-reap-16-annual-gains.html

“Rising rents could signal housing market strength”Source: http://www.sanluisobispo.com/2012/03/15/1990244/rising-rents-

could-signal-housing.html#storylink=cpy

“Hispanics Projected to be Mega-Consumer in Housing Market”

http://www.dsnews.com/articles/hispanics-projected-to-be-mega-consumer-in-housing-market-2012-03-12

Articles


Articles“Buying Foreclosures: One Investor’s Key to Success”

http://www.cnbc.com/id/46630208

“Investors target property tax deadbeats”http://money.cnn.com2012/03/05/real_estate/tax-liens/index.htm

“Survey: Commercial real estate outlook brightens”http://www.miamiherald.com/2012/03/15/2696192/survey-commercial-real-

estate.html

“Commercial condo in Chester a creative choice for businessman”

http://www.recordonline.com/apps/pbcs.dll/article?AID=/20120318/BIZ/203180315/-1/NEWS

“Miami Condo Market on the Mend”http://www.usnews.com/news/blogs/home-front/2012/03/16/miami-condo-

market-on-the-mend

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How do you Eat an Elephant?

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Understanding Valuation

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SFR, Condos, 2-4 Residential UnitsComparables

5+ Residential Income UnitsGRM (Gross Rent Multiplier)Cap Rate (Capitalization Rate)

Commercial, etc.–Cap Rates (Capitalization Rate)

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Understanding Valuation


ComparablesDefinition:

Able to be likened to another; similar; Of equivalent quality worthy of comparison

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Superior Similar Inferior


GRM (Gross Market Rent)Definition:

The ratio of the price of a real estate investment to its annual rental income

before expenses

GRM = sales price / yearly gross income

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Capitalization Rate 19

Definition: Capitalization rate defines the percentage number used to

determine the current value of a property based on estimated future operating income.

The Numbers in Play6 unit apartment sold for $300,000

Rental Income after expenses is $24,000

$24,000 / $300,000 = .08 or 8% Capitalization Rate© Copyright Tony Alvarez 2012

Identifying Your Role in

Real Estate Investing

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Identifying Your Role in RE or…Speculator – Buy & Sell –Short Term- High RiskInvestor – Buy & Hold – Long Term - Low RiskEntrepreneur – Does it all!

- Brings Speculator & Investor Together • Real Estate Agent• Wholesaler• Contractor• Developer• Bird Dog

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Superman of Real EstateDoes ALL 3

- Speculator

- Investor

- Entrepreneur

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For the most part ALL of us are RE Entrepreneurs


Choosing Your Entry Point

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The Ultimate Beginner

No Cash

No Credit

No RE Experience

No RE Education

No RE Contacts

Desire & Determination


Assessing Your Value:What Do You Bring to the Table?

Money – CashCredit – Borrowing PowerKnowledge of Market– Appraiser/Agent/ Lender

Skills – Contractor, Internet, Computer, Office

Experience – Prior Deals (good or bad)

Time – Unskilled Labor

Contacts – Provides all of the above

Confidence Ability to deal w/risk/stress/lossDesire – Determination

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Assessing Your Value:What Do You Bring to the Table?

Money – CashCredit – Borrowing PowerKnowledge of Market– Appraiser/Agent/ Lender

Skills – Contractor, Internet, Computer, Office

Experience – Prior Deals (good or bad)

Time – Unskilled Labor

Contacts – Provides all of the above

Confidence Ability to deal w/risk/stress/lossDesire – Determination

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8 Steps of a Real Estate Deal

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1. Find It

2. Inspect, Estimate & Appraise

3. Buy It4. Finance it

5. Fix It

6. Rent it

7. Sell – Wholesale or Retail

8.

Reevaluate,

Improve,

Repeat

3. Buyer’s Agent

4. Loan A

gent

5. Contractor

6. Property Manager

7. Sales Agent

8. Deal

Coordinator

(Assistant)

2. Property Inspector

1. Bird DogOr Agent

Improve Your Value By

Specializing! (specialty???)

Getting Your Foot in the Door


Getting Your Foot in the Door (cont.)

Intern Large Company

Research Assistant to Small Investor

Section 8 Rental Expert

Middle Man for City Code Enforcement

Trash Out, Handyman, Cleaning, Staging

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Acquisition Strategies

in 2012

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Broad Strokes RulesBuy Low, Sell High OR ELSE!!!

NO or negative appreciation, but buyers for unrepaired or repaired inventory:• Buy below present unrepaired value then

wholesale to Speculator/Investor or retail to end user

Appreciation present• Buy & hold rentals to peak price level & sell

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Acquisition Strategies Buy Below As-is Value

• Instant equity• Improve prop. value

‾ Capital Improvements‾ Improve cash flowoRaise RentsoReduce Debt

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ARV- $100,000As-is Market Value - $75,000

Purchase Price - $32,000Repair Costs - $5,500


Acquisition Strategies Buy At or Above As-is Value

Improve prop. value - Capital Improvements‾ Improve cash flowoRaise RentsoReduce Debt

Creative financing oDefer Payment of debt on seller’s equity

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Risks & RewardsBuy below “As-Is/present Market Value”

Buy below construction cost

Buy below area GRM (Gross Rent Multiplier)Buy with below Market Rents

Buy 10-20% Cash Flow after 100% financing

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Favorites in 2012

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Types of Real Estate36

SFRs

Condos

2-4 Res. Income

5+ Res. Income


Retail –buy fix sell to Owner Occupant

Buy fix, rent & hold long term for Cash Flow

Utilizing 100% financing

Buy & Sell Wholesale to Active Investor

Buy fix, Rent & Sell to Passive Investors

“Turnkey Investments*”

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Exit Strategies


Types of Financing39

Conventional Private Investors (IRA)Hard MoneyLocal Commercial BanksCredit UnionsHUDFNMA Homepath - up to 10 deals VA foreclosures – 30 yr fixed rateCreative Financing -

Sellers Carryback or sell to 3rd party© Copyright Tony Alvarez 2012

Tips for 2012 & Beyond

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1. Mtg Calculators• 15 vs 30 Year Mtg

• APR

• ARM

• ARM vs Fixed Rate

• Interest Only

• Maximum Mtg

• Rent vs Buy

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2. Yield & CashFlow Calculators• Short Form 1-4 Unit• Multifamily (5+ units)

3. Mtg Payoff Calculator

4. Fixed Rate Mtg Calculator

5. Mtg Tax Savings Calculator

6. Bi-weekly Pmt Calculator© Copyright Tony Alvarez 2012

Performance & RelationshipsPerformance

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= Competition = False Conception


Performance & RelationshipsRelationship building = Cooperation

Higher Level of Communication

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Performance & RelationshipsHow do you invite cooperation

Self-ImprovementHonesty

Integrity

Transparency

Unrelenting Dedication to your business

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“My fellow Americans, ask not what you can do for you, ask what you can do for your

country.”

-John F. Kennedy


Thanks Again, Bruce! 36

$10,000,000


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Re-vamped website w/new investor FREE Starter Kit

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TonyAlvarez.com

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Tony Alvarez 1 Presented By © Copyright Tony Alvarez 2012.

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