That’s what members and guests said about July’s Investor Meeting. Pat Bell, REIS Member and Mortgage Broker with M-Lend, presented a case study on one of his recent personal investment endeavors. In sharp contrast to other case study presentations, Pat’s premise was that he had a “Gut Feeling” about this deal and he acted on his gut. Admittedly, it’s not necessarily the way an investor should run a real estate investment business, but that was his story and he stuck to it—basically. Pat’s deal was a Bladensburg rambler, about 50 years old. This home had significant water infiltration problems and extensive mold. It also needed the usual kitchen, bath, windows, paint and carpet. He knew what he had to pay for the property and he had a rough idea of the worst-case renovated resale value. But, while he did not do the math to the penny in the planning process, it became evident that his 25+ years of experience enable him reasonably accurately ballpark the cost of renovations. Further, he used contractors he knew quite well and a few contractors who were referred to him by long-time friends. This gave him a sense that he was getting fair bids without going through the competitive bidding process.

In the final analysis, Pat did pay more for the renovations than planned, but his worst-case final sales price was some $40,000 less than the price he actually received. So, all’s well that ends well—he realized about a $37,000 profit on the deal. That made it all right—not so fast. Here’s where Pat was challenged by members, guests and former speaker, Roosevelt Lafontant, whose presentation was just the opposite. Roosevelt likes to enter a deal knowing exactly what the renovation cost will be and how many minutes it will take so he can peg his carrying costs. While it was a lively discussion, it demonstrated that there is more than one way to succeed at a real estate investment, but that Pat’s profit came partly from his experience and mostly from luck.

Many of us start our investing careers on gut instinct—some have reliable guts; some not so. But, with experience, we learn approximately what it costs to do a new roof, to paint, to waterproof a basement and so on. With that experience, it might sound like we’re operating from the gut, but, in fact, we are relying on experience. The danger is that prices change, job scopes change, the contractors we use change and not all contractors offer the same pricing. So, only by carefully planning can we enter a deal knowing accurately how we will exit, but that is not to say that failing to plan every detail ensures failure. Experience and gut do play a major role in real estate investing. After all, even if you plan to the nth degree, the market can change over the course of 90 to 180 days thereby destroying the best laid plans. Planning does not ensure success. Failing to plan does not ensure failure. Experience is a valuable tool, but detailed planning is a critical element in reducing the risk associated with real estate investing.

Next Meeting: August 17 at 6:30 PM

JUNE’S EVENT- REIS is a proud sponsor of a spactacular Business Coaching Event.  Please join us on June 17th by clicking here and enter the Promo Code SWDC070 for a complimentary ticket.

LAST MONTH’s MEETING RECAP- On May 18^th the members of REIS met for their usual meeting but the meeting content and format was brand new. 

 Over the past couple month’s we had been hearing requests from our members to try an incorporate some real case studies into our monthly meetings.  And this month’s meeting saw just that. 

 Deborah Diehlman, a REIS investor member and CPA lead a case study of a property she had just completed.  The goal was to discuss and analysis a complete investment transaction from identification to close.  The result was that, and MORE!  The meeting was extremely interactive and topics covered everything from financing to rehab to exit strategy.   Based on the evaluations, the content and our meeting was the most successful to date.

Learn the tricks of the trade from the experts and from your piers!!!

This month REIS will continue it’s Case Study Series. The attendees will be working with actual scenarios, discussing challanges, analyzing numbers and extrapolating outcomes. CLICK HERE TO REGISTER

With the help of REIS’s custom real estate investment analysis spreadsheets the attendees will be working with actual scenarios, discussing challenges, analyzing numbers and extrapolating outcomes.

If you have a property you’re considering, please feel free to bring them for a group analysis (disclosure of specific property address is not required)

APRIL RECAP

The members of REIS and their honored guests had the priviledge of a presentation from one of their own. One of REIS’s charter members and one of it’s most successful investors, Roosevelt LaFontant, shared a tremendously valuable presentation on the keys to keep you rehab projects on schedule and on budget. These techniques showed the attendees how to take the guest work out of scheduling and budget, how to identify EARLY in the process when you’re behind schedule or over budget so corrections can be made before project completion

.

April’s Investor meeting will bring a new twist.  On April 20th REIS will be holding a very hands-on meeting.  We will be reviewing an actual case study of one of our members recent investments.  We will be looking at several different sides of the transaction and discussion the challenges along the way.

THIS IS A CAN”T MISS FOR INVESTORS (the registration will be posted soon)

The event was, no doubt, a success and REIS was happy to see several new members attend the meeting.   We hope you’ll join us on April 20th

ATTEND OUR MARCH EVENT

The changes in investor financing are constant and significant. Learn what financing is available to investors whether to hold, flip, refinance or rehab.

Overview:

1. Requires landlords to disclose potential at-risk tenants about previous LBP findings
2. Requires landlords to remove lead paint from properties that will be rented to at-risk tenants, defined as (a) children under six years old and (b) pregnant women.

1. Requires the Mayor’s office to inspect dwellings upon learning about potential lead paint hazards :
   1. Inspection can occur without notice to the landlord upon presentation of appropriate credentials to the owner and tenant (imminent threats allow entry without notice)
   2. Mayor’s office can mandate the temporary relocation of the at-risk tenants at the landlord’s expense
   3. Mayor’s office can mandate to the landlord to eliminate the LBP hazard in the property
   4. The tenant has a right to return to the dwelling under the same terms at the conclusion of the LBP removal work.
   5. The Mayor’s office may move to get the D.C. Attorney General to authorize at the cost of the landlord (a) relocation of a child with an elevated blood lead level and(b) correct any LBP hazards

Failure to pay the costs will result in a lien being placed against the property.

Triggers for this particular regulation:

1. Any rental dwelling unit built prior to March 1, 1978
2. Any property that the Mayor determines may have contributed to a child’s elevated blood lead level.
3. LBP Hazard means any condition that causes exposure to lead from:
   1. Lead-contaminated dust
   2. Lead-contaminated soil
   3. Deteriorated LBP or presumed LBP
   4. LBP  presumed LBP that is disturbed without containment

Complying with the regulation:

1. Starting January 1, 2010 owners of subject properties must disclose to tenants the information reasonably known to the owner about the presence of LBP hazards and pending actions by the Mayor under the Act.
2. Disclosures must be provided before any changes in occupancy or contract for possession is executed.
3. For a rental unit in which an at-risk person resides or regularly visits and the tenancy is commencing, a lease agreement exists, or a lease renewal signed; owner must provide a LBP clearance report issued within the last 12 months before obligating any lessee

Exemptions:

1. Properties built after March 1, 1978
2. Properties determined to be lead-free in the interior and lead-safe on the exterior (by a District-certified LBP inspector)
3. Three clearance reports are submitted over a period within the last seven years and issued at least 12 months apart

Article submitted by Scott Bloom, Washington Property Management

Information compiled from a Client Courtesy Memorandum furnished by the law offices of Magruder, Cook, Carmody & Koutsouftikis

Time is money!  As a real estate investor being able to effectively screen properties and only spend time and effort and potential money-makers is paramount to your success.  But so many investors get bogged down trolling for properties with very little success.

February’s meeting brought us Charlie Matthews with Hayman Realty Inc.  Charlie delivered a tremendously informative presentation on how investors can effectively interpret the public MLS printouts to find the diamonds in the ruff.

Also please help us welcome two new investors!