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Golden opportunity to invest

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How to Invest in Forclosures and Short Sales

How to Invest in Forclosures and Short Sales

Published in: Real Estate

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  • What we are facing right is market correction. Historically, the market had corrected it self. By its natural trend, the market will average itself
  • Someone else pays for your investment - Your tenants literally pay for your investments.. Over time, the value of the property increases, your mortgage payments decrease, as the principal is paid off effortlessly.
  • Transcript

    • 1. A Golden Opportunity to Invest
      • Why you should not miss this unique opportunity
      • What investment is good in today’s market?
      • How you can minimize your investment risk
    • 2. Welcome to MyCasas.com
      • Mission Statement
      • Become be the Leader in foreclosure/investing with proven strategies.
      • Create a network club of investors, rehabbers, construction workers and hard money lenders. Where we can each learn and benefit from each others knowledge.
      • Market our products and services.
    • 3. Who we are?
      • We area a group of like-minded real estate Entrepreneurs and investors that are uniting our capital and expertise resources in order to take advantage of the real estate opportunities in today’s market
    • 4. Our Code Of Ethics
      • These are our 4 core values in our Organization. . We expect each member to comply with these principles:
      • ETHICS OF COMPROMISE
      • PROFESSIONALISM
      • TEAMWORK
      • HONESTY AND CONFORMITY WITH THE LAW
    • 5. Our Management Team
      • Fausto Cuzco: Founder : Realtor ,Loan Officer, Auction, Foreclosure and Short Sale expert: Over $15,000, 000 in sold properties
      • Bachelor Degree in Marketing , Masters Degree in Political Science {Northeastern IL University ,2006}
      • Daria Vasko: Marketing and Project director … Law student
      • Fausto Guaman: Development Advisor: Architect with over 3 years on field experience. Graduated from UIC , 2006
      • Benita Delgado... Financial Advisor : CPA, TAX Consultant... Graduated from Northeastern IL U 2006
      • Juan Chichay : Senior Construction Manager .. Over 10 years in the construction and development business
      • Rene Celis: Attorney , Our legal Adviser
      • Robert Boban: Mortgage Broker
    • 6. Recent sold Properties: 90% Foreclosed: Joint the Wining team
    • 7. Our Current Projects 2009
      • HADDON STRATEGY
      • A) flip over Buy and Sell
      • Time Frame 2-4 months
      • Sell below market Price 21-24K each
      • Time frame:May-Agust
      • 3) Another Property
      • Another Property
      • Time Frame: October-December
      • 1145 Central Project
      • Project Completed
      • Property Under contract
      • Closing April –May 2009
      • 2) Walton Strategy
      • Flip-Over buy and Sell
      • Time frame 2-4 months
      • Sell Below Market 21k
      • August-October
      Secure al least 3 properties in 2009
    • 8. Our Business Strategy and Goals
      • A)     Secure at least 2-3  Properties this Year in our Target Areas
      • B)      Follow our work plan by minimizing our labor and material expenses
      • C)      Sell  those properties at or below market price for fast sell
      • D)     Make at least 21-24k profit individually in all our projects
    • 9. How we calculate profit?
      •                                                                
      • 1)  Scenario one (in a 18k purchase price)
      • Purchase price                                                               $18,000
      • Minus labor and material expenses                         $29,000
      • Total                                                                                 $47,000
      •  
      •  
      • Selling price (Minimum)                                               $129,000
      • Minus seller closing costs                                             $5,000
      • Minus 2.5% seller commit ion                                     3,225
      • Minus other labor charge (100x6x4x2)                $4,800 (100/ day/ 6 days/ 4 weeks/ 2 months)
      •                                                                                          $115,975
      •   Minus our total investment                                       47,000   
      • Net profit                                                                            68,975/3=23,000+-
    • 10. The best time to invest
        • There are massive foreclosures and things are getting worse.
        • Since many people have lost their homes and the lending institutions are unable to borrow to folks with less than stellar credit, you can owner finance (ask me how)
        • Interest rates are historically "low”
    • 11. RENTAL INCOME PROJECTION
      •  
      • Property can be rented for $1,600 section 8 families
      • Capitalization Rate=costs (or value)/ annual net operating income
      • 1,600X12=$19,200
      •           19,200/53,000=36%   100/36=2.7(year/month)
      • The property will payoff for itself in 2.7 (year) or 31 months
      •  
      •  
      • The rate of Return of our investment is 63%
      • ((Return - Capital) / Capital) × 100% = Rate of Return
      •   ((19,200-53,000)/53, 00) x100%=63%
    • 12. Default means the home owner stops making payments,, Reo, the bank owns already the property/ Auction, when the property is being Auctioned
    • 13. Nationally, foreclosures are still in the rise
    • 14. As of today, there are 78,263 foreclosures records in Cook county Updated as March 2008 Updated ilFLS Database info: Wed Mar 26 2008 ACTIVE LISTINGS 120433 Last Update: 16:18:49 Mar 26 2008 County: Records: Auctions   Cook County: 78263 35374   Lake County: 8512 3949   Kane County: 6760 3723   Dupage County: 7680 3779   Will County: 10782 5259   McHenry County: 3990 1639   Kendall County: 1482 550   Winnebago: 2899 1149
    • 15. The subprime mortgage crises will cost Illinois about 5.4 billion 2009
    • 16. Three Ways to Invest in Today’s Market
      • Fix and flip
      • Buy and hold Real Estate
      • Rental Investing
    • 17. What it takes to be an Investor
      • If you are purchasing a property that is not your primary residence, you are an investor
      • Your Responsibility
      • Network with people, companies that share your goals .
      • Don’t be pessimist, negative about the market, the world.
      • People with this attitude will never grow financially or personally
      • Cause-Effect ( nothing will happen tomorrow unless you make a decision today)
    • 18. Avoid this Novice Mentality
      • Investing in real estate should not be approached as a hobby. It takes experience, understanding and knowledge to formulate and execute a plan. You are mistaking if you think that you can watch a DVD or read a book and instantly gain enough knowledge to thoroughly research markets
      • AVOID
      • 1. Real Estate = Get Rich Quick Mindset (Please, Get a College Degree)
      • 2. Believing Cheapest is Best ( remember the 4P’S of marketing. Place, Price, Promotion & Product, these factors are vital)
      • 3. Do-it-Yourself Investing ( I don’t want to be rude but 80% chances you will fail).
      • 4. Thinking Markets Can Be Timed ( "You can't time real estate markets, therefore there is no right time to invest.)
      • 5. Prioritizing Cash Flow Over Appreciation ( positive cash flow is not bad, but long-term appreciation is the goal)
      • 7. Sacrificing Profits Because of Proximity ( have an open mind )
    • 19. Formula To Investing
      • You should not put all of your money into only one Investment
      • Diversify your investment
      • Fix and flip * Property appreciation * Cash flow * Other people's money paying your mortgage.
      • Lest focus on property appreciation Here's a simple example: Pretend you find a desirable property for $100,000, and you buy it for 25% down ($25,000). 1) Appreciation: Property goes up in value by 5% in year 1. It's now worth $105,000. Return after one year is 5000/25000 = 20% on your $25,000 investment in the first year! 2) Cash flow: Rent each month is $1000. Your mortgage, insurance, taxes and miscellaneous expenses are $900/month. Income minus expenses = $100/month. 12 months x $100 = $1200/year income. Add that to the appreciation and you have made 6200/25000 = 25% in the first year through appreciation and cash flow. 3) Other people's money paying down your mortgage: Assuming you have a mortgage at a 5% fixed rate, at the end of the first year you will owe $73,440 on your $75,000 mortgage. You have now built an additional $1560 equity into the property ($75,000 - $73,440 = $1560). Your return including appreciation, cash flow and reduced principal give you a first year return of 7760/25000 = 31%.
    • 20. How I made $23,000 in 5 months
      • It might not be a lot of money but yes it true I made that money after taxes. Below, I give a scenario I used, also, most of my clients are using this method.
      • Long term investment 4 unit
      • 4 unit building scenario
      • 100,000
      • +20,000( 20%down)
      • 40,000 (repairs)
      • ------------------------
      • 160,000
      • Rental
      • 800x4=3,200x12=38,400x2.5=96,000
      • Your monthly payments including taxes and insurance
      • 900x12x2.5=27,000-96,000=67,500-60,000 total investment=7,500
      • 1600x12x2.5=54,000 (sell in 5 years 240,000-160,000=80,000+54,000=$135,000
      • Short time investing single family, condo
      • You purchase a single family
      • 50,000
      • 35,000 ( invest, repairs)
      • -----------------------
      • 75,000 total
      • Sell for 130,000-75,000=55,000-15,000(closing cots, selling agent)= 40,000 profit
      • Note if you don’t sell, property is rented at $ 800 per month which is still paying for it self
      • The goal, the property has to pay by itself in either scenario.
    • 21. Target Areas
      • Virtually, You can invest any where in Chicago, but as a matter of preference we focus in this development areas
      • AUSTIN
      • HUMBOLDT PARK
      • EAST GARFIELD
      • SOUTH LAWNDALE
    • 22. Historically, Real Estate had always been a good investment.
    • 23. The Power Of Leverage (If your $100,000 investment produces a 30,000 net gain in two years than your annual rate of return is 15%. The stock Market produces ( historically) an average annual rate of return of 8-9%
      • MMM
       
    • 24. My final thoughts
      • Weak men will always wait for opportunities to happen; strong men and woman will seize the moment and make them happen because they know that an obstacle, a difficulty is often an unrecognized opportunity.
      • Remember. Nothing will happen unless you take action today.
      • Thank you
      • Fausto Cuzco