the real deal - memberize...legislature regarding real estate. from personal experience, positive...
TRANSCRIPT
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Volume 2, Edition 1
WELCOME! Welcome to the newly elected Officers of the Board of NHREIA – President Jack Lavoie Vice President Rick Arguien Chairman of the Board Richard Dale-Mesaros Treasurer Ann Bellamy Secretary Fran Gehling Boar Members at Large- Kevin Lacasse Jared Williams In 2007, NHREIA accomplished many goals and provided a slew of opportunities for the members. At the early onset of 2006, NRHEIA began producing this quarterly newsletter as well as offering advertising space and sponsorship opportunities for the members wishing to promote their businesses. In March, NHREIA hosted Real Estate Guru Louis Brown. This event was very well received by both the NHREIA group and the Louis Brown Camp. At the onset of March, we implemented the online registration system which allows members and visitors to sign up, register and pay for individual meetings and membership fees. We’ve hosted Power-Networking Breakfasts as well as our educational series “The Real Deal -101” which is focused on helping newer
investors find, evaluate, negotiate and fund the deal. It has been a very exciting 2006 and we are poised to move into 2007. NHREIA is focused on moving forward and continuing to provide educational and networking opportunities for our members and visitors. We wish everyone a happy and prosperous New Year! CALLING ALL VOLUNTEERS! By Bernadette Trafton, NHREIA Board Assistant First I would like to thank the Board of NHREIA for volunteering their time to provide education and networking opportunities for investors in NH and surrounding areas. I would
also like to thank our current volunteers Leeann Arguien, Bea Hamel and Jeff Manseau. Your help in the past months has been phenomenal! The NHREIA membership has grown to almost 400 members during the 2006 year. Due to the increase of the membership, there are numerous opportunities to volunteer with NHREIA. We are looking for volunteers to help with everything from monthly meeting preparation to becoming a liaison for the NH Legislature regarding Real Estate. From personal experience, positive things happen to you when you hang out with the Board, who are all self-motivated, positive individuals with an incredible amount to share. Please contact me at 603-863-6568 or [email protected] to volunteer your time! Happy Investing, Bernadette Trafton NHREIA Board Assistant
THE REAL DEALProduced by the New Hampshire Real Estate Investor’s Association (NHREIA)
Visit www.NHREIA.com
IN THIS ISSUE Upcoming Speaker Schedule
President’s Message by President Jack Lavoie
Who’s Holding YOU accountable by VP Rick Arguien
A Testament of Good Will to Real Estate Investors by Board Member at Large Kevin Lacasse
Confessions of a Networking Madman by Chairman of the Board Richard Dale-Mesaros
Deal OR NO Deal by Treasurer Ann Bellamy
Bert’s Blog by Founder Bert Cox
NHREIA Logo Contest by Bernadette Trafton, Board Assistant
January 2007 NHREIA is dedicated to education and networking for Real Estate Investors in New Hampshire
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NHREIA is dedicated to education and networking for Real Estate Investors in New Hampshire and throughout New England. The Board of NHREIA welcomes all questions and suggestions:
Jack Lavoie, President - 603-644-1000 [email protected]
Rick Arguien, Vice President - 603-315-9160 [email protected]
Richard Dale Mesaros, Chairman of the Board – 603-536-3864
Ann Bellamy, Treasurer - 603-801-2247 [email protected]
Fran Gehling, Secretary - 603-512-2091 [email protected]
Kevin Lacasse, Board Member at Large – 603-530-2091 [email protected]
Jared Williams, Board Member at Large – 603-887-0950 [email protected]
Bernadette Trafton, Administrative Services - 603-834-4587
Meetings: 2nd Wednesday of each month,
6:30 PM
*** The Quality Inn, Wayfarer Convention Center, 121 South River Road, Bedford, NH – 603-622-3766
Please visit www.NHREIA.com for details.
NHREIA is dedicated to promoting and maintaining a professional and ethical standard for all members to abide by as per Article XVII of the NHREIA bylaws.
This Code of Ethics is as follows:
ARTICLE XVII
Code of Ethics I agree not to make promises I cannot keep. I agree to keep the promises that I do make.
I agree to be fair, honest, professional and maintain integrity in all of my business dealings.
NHREIA SPEAKER SCHEDULE February 14, 2007 – THE NHREIA ROUNDUP
NHREIA is holding a Roundup! There will be a variety of stations with specialists
focusing on their own areas of expertise…
FINDING THE DEAL FUNDING THE DEAL
SELL YOUR HOUSE QUICKLY WHOLESALING
REHABBING ETC… ETC… ETC…
DO NOT MISS THIS OPPORTUNITY TO
NETWORK AND HEAR FROM THE MOVERS AND SHAKERS IN THE NH/NEW
ENGLAND INVESTING ARENA! Prepay and Register for any of these events online at www.nhreia.com
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As the new President of the NHREIA, I am excited for 2007 in many different ways. I believe that 2007 will bring great opportunities for investors, as the market continues to produce many more “distressed” sellers. I believe that it is important to study the market and brush up on the skills/knowledge that will capitalize on these opportunities. My prediction for 2007 is that in the residential market, those who learn how to deal with banks and lien holders, will make a lot of money. Short sales and developing contacts in Bank’s REO departments will be huge in ’07. I am also excited to go to work for the group as your new President. I have big shoes to fill, as outgoing President Bert Cox did an outstanding job in his tenure. I think I speak for all of us, when I say “THANK YOU BERT!” for a job well done. In January, the new board will meet for the 1st time and we will be discussing upcoming programs, ideas and events for the upcoming year. While we are a TEAM, I do have a short agenda of items I would like to bring to the board in hopes that we may implement them as part of our program. My goal is to
build upon the great work of the prior board, not tear it apart. I am very proud of the current condition of the board and am only looking to enhance it. I think the next step is to reach out more to the specific needs of the members and therefore will be proposing a system to bring information and learning to each member on a more customized basis. The framework for this is through a mentorship program, in which people seeking specific assistance in a particular area of investing can have a forum/program to obtain the information and guidance from those experienced in that area. I believe the association has done a GREAT job of growing the group. I think the next step is increase the percentage of people within the group doing transactions. Lastly, I want to say thank you for your support and confidence and want to remind everyone that I have an “open door” policy. If you have ideas or concerns, I urge you to call me anytime. Happy New Year!! Jack Lavoie President, NHREIA
President’s Message, Jack Lavoie, President, NHREIA
Need to Fix and
Sell a house?
WE CAN HELP!
CALL Jay Cote at 603.247.4015
YOUR AD COULD BE HERE!
FOR MORE INFORMATION CALL BERNADETTE AT 603-
863-6568 OR E-MAIL AT [email protected]
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We’ve all read the statistics: most new small businesses fail within the first 3-5 years. Why is this? Well, in large part it’s because many entrepreneurs often have no one to answer to but themselves. Ask almost any truly successful entrepreneur and they will likely tell you that a good mentor (or perhaps several of them) is absolutely essential. A true mentor not only shares his or her experience and advice but also holds you personally accountable for your successes and shortcomings. So, who’s your mentor? Who is holding YOU accountable? Because I believe accountability is of the utmost importance and I also believe in leading by example. As a result, I’ve decided to ask you, the members of NHREIA, to be my mentors for 2007. That’s right, I would like YOU to hold me accountable for my 2007 goals! Since education is what the NHREIA is all about, I thought I would volunteer myself to be a sort of “guinea pig” for the cause. Here’s how it’s going to work: starting with this newsletter I will provide you with an extremely condensed version (so you don’t fall asleep) of my 2007 written business goals. I’ll then update you in subsequent newsletter. These updates will
be a brief review of goals set for the previous quarter, how I fared and perhaps some modifications for improvement! That’s right, I’m going to share with you all my successes as well as failures throughout the entire year. You will know all that I achieve (or don’t achieve) and the results that come from my efforts! Now this may or may not be a smart move on my part…only time will tell. I have no doubts that this will prove to be a very educational (and perhaps humbling) experience for myself. But my hopes are that we can make this an “interesting” case study in which you all can benefit from…even if it is at my expense. So here it goes…the following is a brief and very condensed version of my business plan for the year 2007: ACQUISITION STRATEGIES & TECHNIQUES:
• Primary Strategies will focus on the use of; Income Producing Properties, Subject too, Short Sales, Options, Lease Options, Contract Assignments, Small Personal/Hard Money Loans & Cash
• • • • offers, but other creative investment techniques may apply. • Funding: Personal funds and
lines of credit as well as Hard Money, Traditional Bank financing and other creative financing techniques when ever possible.
FISCAL OBJECTIVES:
• $100,000 minimum net profit (via property sales, assignment fees, monthly cash flow from rentals, interest from loans given, etc.) by December 31, 2007. With a $10,000 average net profit/deal I will need to create ten (10) deals. In order to accomplish this, we (my wife & I) must aim slightly higher so the goal will be to acquire fifteen (15) deals which averages out to 1.25 deals each month.
• Create a positive cash flow (passive income) of $500.00/month with a 10% ROI or better by acquiring 1-2 income producing properties by December 31, 2007.
MARKETING STRATEGIES:
• Our main marketing focus: will be on Pre-foreclosures, FSBO’s and distressed property owners of all types.
• Pre-Foreclosure Letter Campaign: Compile and update a daily mailing list of pre-foreclosures from the Public Notices in the Union Leader and send letters and/or
Who’s Holding YOU Accountable?
By Rick Arguien NHREIA Vice President
Page 5
postcards to those within the Hillsborough, Merrimack and Rockingham counties.
• Newspaper Classifieds: 3-4 line “We Buy Houses” type ads will be placed and ran (7-days per week) in the classified section of 2 major newspapers, each covering a separate geographical area. All calls, leads, etc. will be tracked followed up and quantified on a monthly basis.
• Bulk Mailings: targeted mailing lists of 500 individuals or more will be compiled and sent letters, post cards, etc. on a monthly basis. This list will consist of but not be limited to: FSBO’s, out of town owners, ugly houses, probates, recent liens, divorces, expired listings, etc.
• Bank Owned Properties: Each month we will compile and review a list of bank owned properties and their listing realtors within Hillsborough, Merrimack and Rockingham counties (NH) and make appropriate offers on any of the 2-3+ bedroom homes that qualify within desirable locations.
• Bandit Signs: In the month of January hang a total of 95 We Buy Houses” signs throughout target neighborhoods and a minimum of 20-30
signs every month that follows.
• Other: Networking, Business Cards, Website, Yard Signs at properties owned, Vehicle Signs, etc.
SELLING STRATEGIES:
• Networking, listing with a realtor (my wife Lee Ann Arguien), Round Robin Auctions, FSBO, etc.
As I said, this should be a very interesting experiment. I encourage and welcome everyone’s advice, encouragement and CONSTRUCTIVE criticism throughout the year. I also encourage you to find a mentor (preferably someone with experience and an unbiased opinion). Arrange to meet with them on a regular basis…perhaps for coffee or even lunch. Tell them your
goals and how you plan to achieve them. There is no greater motivator than knowing someone else is watching. I know I’m feeling pretty motivated now! If you don’t have a mentor, then you need to start developing those essential win-win relationships right away! Good Luck and Have a Happy and Prosperous New Year! Rick Arguien NHREIA Vice President Rick Arguien VP, NHREIA Bullseye Properties [email protected]
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2.5 years ago, I was working on a rehab in Belmont NH. Looking forward to the next deal, I decided to take a piece of plywood and spray paint it yellow, with black lettering that said “We Buy Houses Cash”. I then stuck it into the ground and forgot about it. Shortly thereafter the phone rang. A weary homeowner named Brian said “I saw your sign in Belmont, and well, my wife and I need to sell our house”, and so there it began. Later that day I was on their doorstep listening to how they had their vehicle repossessed, their credit cards in collections and 2 months behind on their mortgage payments. I told them that I could not help them with their vehicles, credit cards or other problems, but I could help them from having their house foreclosed upon. I gave them $1,000 to move, caught up their back payments and took their house over subject to the existing financing. At the time, they were very grateful. They said it would give them the opportunity to get back on track and buy another house a few years down the road.
At that time, they were happy because they were out from under a burden, and I was happy because I sold their house as is, on a rent-to-own basis and profited approximately $25,000. Since that time, my path has
crossed Brian’s on multiple occasions and he has thanked me every time for helping him out of that situation he and his wife were in. Fast forward to present time; our paths have crossed again. Brian called and said “Kevin, over the last 2.5 years we have been working on repairing our credit and getting back on our feet, now that we have done that, do you have any houses for sale”? I did have a few houses for them to buy and they choose one that we just finished rehabbing. I didn’t write this story to brag about how much money I made off these people, I wrote this story to show how ethical-real-estate-investing can tremendously benefit people facing foreclosure or some other one of life’s curve balls. If I had not stepped in 2.5 years ago, Brian and his wife would have lost their house to foreclosure. They had no other means. I offered them a solution that some people might have misinterpreted as “preying on the weak”. I looked at it as helping out someone that was down on his or her luck. Thanks to that situation, in just 2.5 years, Brian and his wife were able to once again buy a house. If they had been
foreclosed upon, they probably would not have been able to buy a house as soon as they did. It made them ecstatic, and made me feel great that I was able to help someone in their situation!!
Best of Luck!! Kevin Lacasse NHREIA Board Member at Large D&L Homes [email protected]
KM Minemier has merged
with EXIT 1st Realty!
Marlene D. Minemier EXIT 1st Realty
41 South Main Street Concord, NH 03301
Phone: (603) 223-0021 Fax: (603) 229-3293
www.exitnh.com
A Testament to the Goodwill of Real Estate Investors
By Kevin Lacasse NHREIA Board Member at Large
Page 7
As we blast into 2007, now’s probably a good time to set new goals for the coming year and for some of us, improving the quality of our interactions with other people is a worthy addition to the list. Every day we are reminded how much of a people business this is, whether we’re crafting relationships with the Realtors, trying to get bankers on our side, or formulating a win-win solution at someone’s kitchen table. Why don’t we turn all of our daily interactions into opportunities to improve our ability to connect with people?! Shut up and listen! We have two ears and one mouth, so let’s use them in that ratio. It doesn’t matter what the desired outcome, the more we can get the other party to talk about themselves, the easier it is for us to create a scenario that is going to work for both of us. It’s that simple. Next time you find yourself toe-to-toe with another human being, see if you can adopt a similar physical posture, rate of speech and demeanor. Through this kind of ‘mirroring’, you’ll find people will automatically feel more comfortable with you, without realizing why. Get into the habit of having people talk about
themselves – forcing you to shift your focus from your agenda (and fire-hosing them with your vast real estate knowledge), which will in turn provide you with a greater likelihood of success. Talk to pretty much anyone and there’s a good chance either they, or someone they know, might be interested in:
• Selling a property • Buying a property • Lending money • Passing on a great
connection
It never ceases to amaze me how I’ve found a seller or made a great contact through talking to people and these are contacts I simply wouldn’t have made, if I hadn’t taken the initiative and started up a conversation. Make this part of your daily routine and don’t forget to keep your business cards on you…… it’ll give a whole new meaning to that next ride up on the chairlift! Best wishes, Richard Dale-Mesaros Breakthrough Properties, www.re-nh.com [email protected]
CONFESSIONS OF A NETWORKING MADMAN PRACTICE YOUR PEOPLE SKILLS ?
By Richard Dale-Mesaros
NHREIA Chairman of the Board
Page 8
Since last spring, I’ve had many inquiries from new investors about financing a purchase, usually a rehab and flip deal. Many of the deals in question turn out to be “NO deal” when looked at closely, and in fact a common question from new investors is “How do I know how much I can afford to pay for the property?”
Now, I’m definitely not a Rehab Rock Star, like Kevin Lacasse, and in fact flipping is not my area of expertise. But evaluating deals for hard money loans has much in common with evaluating them from the investor’s perspective, since if it’s not a good deal for a hard money loan, sometimes it’s not a good deal for the investor either. So I thought I’d share some of the insight I’ve gained, and courtesy of Kevin, some of the ways he evaluates a prospective purchase. I’ve also included a synopsis of the numbers Ron LeGrand uses in his wholesaling course.
Hard Money (let’s assume for this example the house needs very little work)
ARV $335,000 Less 10% declining market - 33,500 $301,500
65% LTV $195,975
So if you’re paying $240,000 for this house, and think it’s a good deal, you’re going to have to come up with $44,025 PLUS closing costs of approx $3000 PLUS 3 points = $5900 (rounded) plus TRANSFER TAX on buy and sell $4,300 plus CARRYING COSTS plus INTEREST plus, well you get the picture.
Breaking down the numbers Here are some guidelines of what you might expect this house to cost you:
ARV $335,000 Less 10% to sell quickly - 33,500 (maybe even more if the market is dropping fast) $301,500
Selling Commissiion-5% - 15,075 (yes, you can sell FSBO, but what if you are still working a full time job, or the house is far from you, or, or, or…..) $286,425 Profit 20% $ 60,300 (yes, you can take less if you want, adjust the numbers to suit) $226,125 Rehab costs $ 5,000 (maybe zero, but don’t forget to expect the unexpected) $221,125 Carrying Cost 6 mo $ 20,000 (interest @13%, heat, taxes, insurance, etc)
$201,125 Closing costs buy & sell $ 14,000 (points, transfer tax, title search and insurance, attorney, etc)
$187,125
You can adjust the numbers above to suit your situation, but these numbers didn’t take into account a faster-than-expected declining market, if you can’t sell as quickly as you thought, assignment fees, ooops factors, unexpected illness or injury, mistakes in estimating ARV or any of the other zillion things that can happen.
Ron LeGrand uses the following percentages in his wholesaling course
ARV $300,000 for example Less Repair Costs $ 5,000 Less Purchase costs 1% $ 3,000 (not enough usually) Less Holding costs 3% $ 9,000 Less Sales costs 3% $ 9,000 (this is without a realtor) Profit 20% $ 60,000 Hedge factor 3% $ 9,000 Max Allowable Offer-30% $205,000
His Maximum Allowable Offer is 70% of ARV less repair costs, and that doesn’t take into account the high transfer tax in NH.
These are some starting points for looking at a deal. If you are tempted to ignore some of them, here is a reminder of some of Murphy’s Laws:
If it can go wrong, it will. Nothing is as easy as it looks. Everything takes longer than
you think. Anything you try to fix will take
longer and cost you more than you thought.
Happy New Year, everyone!
Ann Bellamy, Treasurer, NHREIA Private Equity Lending 603-801-2247 321-226-6464 fax [email protected]
Deal?…..Or NO Deal?
By Ann Bellamy Treasurer of NHREIA
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Page 10
Hello Fellow Investors, For those interested in prognostication, trend watching and market outlook, I have listed the figures below that compare the first and second half of 2006 listing and sales data for Merrimack County according to NNEREN (MLS). I have chosen Merrimack County because it seems to be fairly representative of southern and central New Hampshire and because the numbers are more manageable. Currently Active (1/3/07) 1090 Active 6-30-06 (approx) 1280 Listed
1/1/06 to 6/30/06 1764 7/1/06 to 12/31/06 1358
Sold
1/1/06 to 6/30/06 716 7/1/06 to 12/31/06 718
Expired
1/1/06 to 6/30/06 545 7/1/06 to 12/31/06 950
A few observations are immediately apparent. First, sales for the first and second half of ’06 were nearly identical. How do you like that, people are really are still buying homes. On the other hand, the number of unsold (expired) homes was up almost 75%. Fewer additional new listings were added and
inventory is shrinking slightly. Traditional homeowners that just want to sell are taking their houses off the market. So what does it all mean? 2007 looks to continue rising foreclosure rates, increasing supply from sellers that need to sell with continued downward pressure on pricing. The beginning of the year has brought a tightening of credit, fewer loan programs
and significantly lower appraisal values. Traditional real estate is struggling while creative real estate is flourishing. The investors currently benefiting from the changing market conditions are those willing to be aggressive in their marketing, doing rent-to-own, seller financing, short sales, and rehabs. And of course, buying by the numbers has never been more critical. I wish you all a successful and prosperous New Year. Sincerely, Bert Cox
Bert’s Blog By NHREIA Founder Bert Cox
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Members and Advertisers Support your Organization!
Take out an ad or give this to your favorite vendor. Ads must be submitted via clean master copy or “camera ready”. E-mail your ads to
[email protected] (.jpeg or .gif format). Call Bernadette at 603-863-6568 for payment options.
NHREIA Advertising and Sponsor Options: Newsletter Advertising Alone: Discounts Available Business Card $ 25.00 per insertion 10 % per 2 insertions ¼ page $ 60.00 per insertion 20 % per 4 insertions ½ page $100.00 per insertion Full Page $175.00 per insertion Sponsoring Opportunities: Standard Sponsor *- Flyer insertion in membership packet for the year $300.00 Premium Sponsor *– Flyer insertion in membership packet for the year And business card size ad in each issue of quarterly newsletter $375.00 Premium Plus Sponsor *– Flyer insertion in membership packet for the year and ¼ page ad in each issue of quarterly newsletter and vendor table to $500.00 set up marketing material at monthly meetings. *Flyers must be mailed to Bernadette Trafton at PO Box 196, Sunapee, NH 03782 or hand delivered at a monthly meeting to be inserted in membership packages.
Sign me up! Name/Company_________________________ Tel ____________________ Address_________________________________________________________ Fax/E-mail_______________________________________________________ Ad Size/Description ______________________________________________________ E-mail orders to Bernadette at [email protected] Newsletter ads $___________ Call Bernadette at 603-863-6568 with questions. Sponsor Package $___________ Make checks payable to NHREIA Minus discounts - $___________ Mail orders to: Bernadette Trafton Total $___________ PO Box 196 Sunapee, NH 03782
NHREIA 816 Elm St.
Manchester, NH 03101 www.NHREIA.com
Page 12
816 Elm St. #157 Manchester, NH 03101 www.NHREIA.com
NH
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