Lesson 14: Profit Strategies

December 18, 2023

Review:

  • Negotiation
  • Final Project Submission Deadline
    • Due no later than Wed, Dec 20 at 12p

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
    • 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
      • “Live and Flip” approach
      • House-Hacking
    • 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
    • Short-term rental

Assignment:

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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