100629 you'll need plan be if

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Saving The Planet One House At A Time GreenEarthEquities.Com © 2010 You’ll Need Plan B If: 1. You spent too much 2. You mis-judged the neigborhood. 3. The Economy Changes 4. The Market Changes 5. Your Life Changes 6. Your Philosophy Changes 7. Your Options Change

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Being flexable in uncertain times regarding unplanned business challenges and person life changes.

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Page 1: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

You’ll Need Plan B If:1. You spent too much

2. You mis-judged the neigborhood.

3. The Economy Changes

4. The Market Changes

5. Your Life Changes

6. Your Philosophy Changes

7. Your Options Change

Page 2: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

Review Of 8 Exit StrategiesAt GreenEarthEquities.com

Type 90728 in the search boxFor the 8 Exit Strategies.

***Know how you will get out...

Before you get in.

This should include at least:Plan A, Plan B, &Knowing when to

change plans. Summary on the next page

Page 3: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

1. Buy & Wholesale Flip2. Buy, Renovate & Retail To

Homeowner3. Buy, Renovate, Retail Flip

With Discount Equity4. Buy, Rehab, Seller Finance &

Mortgage Note5. Buy, Rehab, Rent, Cash Flow

& Investor Flip6. Buy, Rehab, Rent, Package &

Sell to Investor7. Buy, Rehab, Sell with Lease

Option.8. Buy, Rehab, Re-Finance

Equity & Rent

My Favorite in last year’s Seller’s Market

Not enough room for Energy Package

Takes more money than most of us have

Not enough room for Energy Package

This can move a hard to sell house.

Opens up a bigger pool of buyers who aren’t as demanding of concessions (may need to

combine with #8 to get your cash back)

A good choice if Plan A (#2) doesn’t work. You get your money

back and keep going

5 home minimum

Page 4: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

Blessed Are The FlexibleFor they shall not get stuck with bad plans that aren’t

working.

Know when to hold ‘emWhen to fold ‘em

(& change strategies)

One Plan might be to 1. do the renovation.

2. Market it for sale for a month, If it doesn’t sell, 3. Change strategies, Re-

finance and rent ..... ?

Page 5: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

Flip vs Buy & Hold

Benefits of Energy Wise Flipping (For those who care about

Green and the Environment and Carbon Footprints)

(Most Investors dont)

Eliminate more blightMore Green Jobs

Improve NeighborhoodsIncrease Tax Base

More Carbon ReductionLess Reliance on Foreign Oil.

Page 6: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

Spent Too Much OrMis-Judged The Neighborhood

These two usually go together.One causes the other.

If you find potential buyers saying, “Great house, but not quite the neighborhood we’re looking for”... It may be time

to switch plans from #2 to #8.

It will require refinancing for you to stay in the game

Page 7: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

Economy, Market Changes

These two may be connected but maybe not.

The Economy was pessimistic 2 years ago, causing most

investors to “sit out”That made for a great

buyers market.Now Optimism has brought hordes of investors back in,

reducing the inventory, making good deals harder to find and

more difficulty to sell at a high price

Page 8: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

Buyers Market - Sellers MarketWhen more buyers come into

the market, like now, the

inventory shrinks and good

deals are harder to find.

These homes then flood the

market making good prices

harder to obtain at time of

sale. This may indicate a time

to change exit strategies.

(from 2 to 8, for example)

Page 9: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

Life & Philosophy ChangeI’m moving to Virginia

(Following the Grandbabies)GreenEarthEquities will

continue in California with the team we have created.This removes one of my reasons to prefer only

flipping(Disliking Landlord Issues)

Because those responsibilities will now fall to my associate, I can now

consider #8 BRRR

Page 10: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

Options Change

I am not suited for landlord responsibilities, preferring to design new systems, spend time with grandbabies and

protect my wife from pirates on cruises. Since Rob will

now be assisting me in taking care of those issues,

the #8 BRRR exit strategy becomes a viable option.

Page 11: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

Changing Directions:

Original Plan:Retail Flip Strategy # 2

Changes:1. We mis-judged the neighborhood.75% of potential buyers discounted

us for “neighborhood”

This home appraised $7000 under asking price (our first one)

2. It’s become more of a buyer’s market

Page 12: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

Challenges Of Changing:The home was purchased with

Line of Credit Money. This needs to be kept turning over, so it’s good for flipping but not

for holding and renting

Solution: #8 BRRR (Refinance)

Refinance Details5.25% 30 years70 - 75% finance

This gets all or most of our cash back to do the next project.

Page 13: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

Maximum Flexibility

With the Refinance in place

we are not locked in to any option.

We can:

1. Rent It.

2. Lease-Option It

3. Sell It

The low appraisal makes it less likely we’ll sell it nowEspecially since it is renting for a healthy cash flow.

Page 14: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

CraigsList To Rent, Lease Or Sell

CraigsList has sections for Rentals and Sales.Both Work Well.

You must keep your ads separate

You’ll need membership

in a credit bureau or way to check

credit and rent history.

Page 15: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

Other Options:

1. We could have LOWERED THE PRICE and sold for cash.

Not totally out of the question but definitely not a first option.

We have found that people with “A” credit seem to

demand more price concessions. This is also more common when the property is

listed on MLS.

Oh,No!

Page 16: 100629 You'll Need Plan Be If

Saving

The Planet

One House

At A TimeG r e e n E a r t h E q u i t i e s . C o m © 2010

Benefits of BRRR #8

1. Cash Flow Positive (wife happy)2. If the R.E. Market goes up, I will

benefit from the increase.3. No Tax Consequences until the

property is sold.4. Low appraisal issue is pushed

into the future when it will probably become irrelevant.

5. Money available to Re-invest

6. Freedom to pursue Zero Energy with 3KW PV system