Lesson 6: Pro Forma ROI Analysis (2 of 2)

September 12, 2019

Review:

  • Pro Forma ROI Analysis Part 1
  • Exam 1 on Thu Sep 19

Presentation:

  • The story of  235 E Adams: ROI worksheet | County Record
    • Purchased from Freddie Mac (foreclosure) in May 2012
      • Paid $32,900
    • Paid less than half estimated value (my estimate)
      • Why? Banks wouldn’t loan on the property
      • How? I offered cash
      • Can you do it too? Probably not right now; 2010-2012 was a once in a generation opportunity
    • Remodel/repair
      • Removed exterior stairs
      • Converted from Duplex back to Single Family
      • Cleaned, painted, etc
    • Rented for $700/month, eventually up to $875/month
    • Last tenant had to be evicted, left a huge mess
    • I decided to sell and “carry the note” (try seller financing)
    • My buyer sold last summer
      • Carried note for over a year
      • Payoff amount was higher than original loan amount (due to missed/late payments).
    • I like Owner Financing

Assignment:

  • Complete Pro Forma ROI Analysis Worksheet with your target property.
  • Estimate 4-year ROI.

Justin

Justin Holman is CEO of Aftermarket Analytics, where he leads efforts to develop cutting edge sales forecasting and inventory optimization technology for the Automotive Aftermarket. Prior to joining Aftermarket Analytics, Justin managed corporate consulting for the Strategy & Analytics division at MapInfo Corporation, leading major projects for retail clients including The Home Depot, Darden Restaurants, Bridgestone-Firestone, Sainsbury’s and New York & Company. Before that, Justin served as Vice President of Software Development at LogicTools, now part of IBM's supply chain application software group. Justin holds a B.A. from Claremont McKenna College, a Ph.D. from the University of Oregon and an Executive Management certificate from Northwestern University's Kellogg School of Management.

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