Lesson 14: Profit Strategies and Location, Location, Location
October 24, 2019
Review:
- Exam 2 Results
- Upcoming Guest Speakers
- Gary Miller and Casey Edwards (Thu Oct 31)
- Sarah Mize (Thu Nov 7)
- Lee Meisner (Thu Nov 14)
- Ryan McWilliams (Tue Nov 19)
- Guest speaker content will be on Exam 3
Presentation:
- Strategies – ways to make money
- Buy something broken
- Cosmetic fixer
- Major repairs
- Problem should scare away amateurs
- Buy at a discount … by paying cash
- Pay cash
- Cash offers are expected to be lower than conventional financing
- Implicit discount to avoid bank financing headaches (e.g., inspection, appraisal, approval)
- 3 “D” opportunities
- Default – owner is facing foreclosure or bank-owned
- Death – death in the family forces family to sell
- Divorce – joint assets must be liquidated
- Pay cash
- Fix and flip
- quick profits/cash
- higher tax rates
- Buy and hold rental
- more headaches
- long term income
- lots of tax deductions
- 2-year hold
- hybrid approach
- avoid short-term gains tax
- relatively quick roi
- Ben V.’s “Live and Flip” approach
- Seller financing
- defer capital gains taxes
- earn interest income
- set price
- Business with Real Estate
- motivated sellers
- buy together, sell separately
- valuation is tricky – proceed with caution
- liquor store deal
- Buy something broken
- Location, location, location
- Geographic Scale
- Market (Metropolitan Area – CBSA)
- Economy/Jobs/Cost of Living
- Natural Environment/Climate
- Culture/Lifestyle
- Neighborhood
- Schools & School districts
- Crime
- Housing stock
- Convenience to work/school/entertainment
- Proximity to parks, green space
- Parcel
- Lot size and orientation
- Traffic
- Cul-de-sac
- View
- Neighbors
- Market (Metropolitan Area – CBSA)
Activity:
- Identify “best” locations
- Metro Areas (where you plan to live)
- Neighborhoods (in Pueblo)
- Lot locations
