WAHOO!! We had a great showing of NINE people at our meeting last night! I'm told that it was because I sent the reminder out last Friday giving them more time for it to make it onto their agenda. Someone else told me Friday was too early because by the next Thursday they've forgotten about the meeting already. So I guess I'll need to send three reminders: one on the Friday before, another on the Tuesday before, and one more on the day of just to keep it in the front of everyone's mind. Feedback is wonderful! It helps me know what I can do better at getting the word out to you all. Thanks!
We learned about what projects each investor was working on and how it was improving their understanding of real estate investing. Some of the highlights included:
Barbara Zitzman-Smith was working on a Tax Lien purchasing project on a property in Ohio. Seems like she's going to foreclosure on a house in a great neighborhood that she bought for $5k in taxes. What a coup!
Shane Hayes is cultivating some contacts for some exciting funding opportunities and he's been doing some Probate Prospecting. He's promised to tell us all about it in an upcoming meeting.
Dennis Leonard updated us on the saga of the intransigent gentleman from Boise with a vacant house in Idaho Falls and gave us some thoughts on prospecting using real estate agents.
Michael McGuire cheered about the sale of his Partnership's sale of their house on Falls Dr and shared with us what it's like to have discovered a renter that DIED in one of his apartments. We determined that we should all make sure we have a place in our rental/lease agreements that asks for "NEXT OF KIN."
Dennis Warr was excited about finishing the rehab on our flip house on Spratt. The carpet goes in on Monday! Yay! He mentioned that we are working on some other projects around town and out of town.
We had a new investor join us from Blackfoot named Mike Fresh. He's got a couple of SFR rentals and is looking to really go to town down in his neighborhood.
Rob Empey shared what he's learned from the two flips he and his partner did last summer. He's realized that in this climate area, it's best to buy and fix in the Winter so you can sell in the Spring and Summer. I heartily agree!
I talked about how important it is for RE investors to think "OUTSIDE the box." Case in point: our duplex in Rexburg where we are working on a Reverse Subject-To Contract where we may sell our house with a basement apt to our renters who need some time to fix their credit while we figure out a way to pay off the amount that we are upside down on the 2nd mortgage. It's a mess, but our knowledge of RE investing and thinking outside-the-box may just get us all out of this situation without destroying our good credit with a short sale.
Lastly, but certainly not least-ly, Dorothy Swiesz joined in by telling us of her many investments, which she is waiting to pay her back with lots of interest. She is excited for them to come back in so she can turn right around and reinvest them again!
Everyone had so much to share and we learned many things from each other.
For the edu-segment of the meeting, I shared another RE Investing strategy that I had learned about the week before from reading a LinkedIn post and comment thread. Joe Villaneuve was the commentor that talked about his system called the RECapSystem for what he calls his Flip to Hold strategy. You can find more about it on his web page where he invites you to take his classes (www.recapsystem.wordpress.com). The most important points that I learned was that an investor can look for un-lien-able funds that are not attached to a specific property (e.g., equipment leasing, hedge fund partners, etc.) with which to purchase and rehab your flips. That way you can use the same funds over and over again by purchasing/rehabbing with cash, then getting a bank loan to refi out 80% of the ARV, which you can then use to buy and rehab another house. Meanwhile, he puts a renter into the first property to pay the mortgage payments on the bank loan.
You can only do this 10 times by yourself (until loan(s) are paid off) because the banks will only allow 10 loans per investor at any one time. But with a Joint Venture Partner, you can use the JV partner's money and do it 10 times again. With 10 or 20 or however many cash flowing properties, the investor uses the cash flow from all but one property to pay off the property with the smallest loan. When that one's paid off, you can go buy another property with that JV partner. That's a possible 20+ properties for you and one JV Partner that are all working to get each house paid off one at a time at a very quick pace AND you did it using the same dollars over and over. This strategy has the potential to create not only additional invest-able funds, but to create cash flow for you to live on while building your million-dollar real estate portfolio.
Thanks for reading this very long post. I hope to see you all at the next SEIREIA meeting next month for SEIREIAs investors only.