Fitting The Pieces TogetherDawn Houlf

Thank YouSpecial thanks to Alan Rivera and Irina Higgs

for allowing us to use their property.

The property is for rent for just $750 per month.

If you, or someone you know may be interested,

please see me for details.

INTRODUCTION

Dawn Houlf

Moved to Las Vegas in 1978

Purchased my first property at 20 yrs old

Self employed since 1998

Built an Empire in 3 states

Single, no kids, 3 golden retrievers (Copper, Sadie and Simba)

Over 20 years sales experience, negotiating, marketing

and customer service

Built a personal portfolio which includes: single family,

multi-family and commercial/industrial

5 IMPORTANT PUZZLE PIECES TO PLATEAUS TO SUCCESS!

Discussion Item One – The Benefits of Investing in Real Estate

Discussion Item Two – How to Create a Plan of Action

Discussion Item Four – Learn About TheTax Advantages

Discussion Item Five – Learn About VariousOptions in Lending

1

Discussion Item Three – How to Analyze Property Worksheet

2

3

4

5

•The difference between your income and your expenses on the property

Cash Flow From Property

•External Appreciation has nothing to do with the actual property itself but comes from economic conditions, land scarcity, etc.

•Internal Appreciation comes from improvement in the actual property itself and is easier for you to control. You can buy a piece of property in need of repair at its “as is” value, improve it and sell it for a profit.

Appreciation in the Value of a Property“External Appreciation” vs “Internal Appreciation”

•The ability to buy a piece of property by borrowing a percentage of its value. No other type of investment offers such a high degree of leverage. It is not unusual for investors to purchase a single family house by obtaining 100 percent financing - i.e. "no money down" real estate investing. This of course is very attractive if you can "flip" the property at a profit, quickly repay the loan and pocket the difference. But of course this can also be extremely risky. If the property doesn't prove to be a good investment, you are in trouble. Never forget the loan is a loan and has to be repaid - somehow.

Leverage

•There are several ways in which property ownership can be used for legitimate tax avoidance - though this should not be your first and foremost reason for buying the property, more a side benefit. We will listen to Rhonda A. Mannes, CPA today.

Tax Advantages

Benefits of Investing in Real Estate

Most people spend their time and money developing the left half of the KASH box.

Most business failures are due to the right half of the KASH box.

KASH• KNOWLEDGE

K

• ATTITUDE

A• SKILLS

S

• HABITS

H

FEEDBACK

Ask yourself these questions: What do I bring to the table? Money, time, resources, etc. What are my strengths? What are my weaknesses? What can I improve on? What am I willing to sacrifice to attain my goals? TV, etc.

Ask others: (Interview business professionals and entrepreneurs)

What makes them successful? How did they do it? What worked for them?

COMMITMENT

Once developed, the key to making the plan work is a commitment to seeing it through coupled with sound implementation.

The commitment to not only creating a sound strategic plan, but to its full implementation must be made at the beginning of the planning process.

The business plan will contain an action plan that will detail the steps to be taken in order to fully implement the plan and tactics defined. That action plan will have specificdeadlines and individuals or teams responsible forcompleting defined tasks.

STEP ONE

Why is it important to write a business plan?

A business plan sets out the future strategy and financial development of a business, usually covering a period of several years.

A business plan is a written document describing the nature of the business, the sales and marketing strategy, and the financial background.

A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals.

Having well defined goals, objectives, strategies and tactics reduces the risk of business failure and helps increase the likelihood of solid success. Be specific!

The Business Plan

Business Operations

A business plan will outline of all aspects of how a business will operate. Initially, these plans are meant to obtain capitol and in the long term, will be…

Business Goals

A Business plan is a written document describing in detail how a new business is going to achieve its goals.

A business plan will layout a written plan from a marketing, financial and …

CONTENTWhat goes in your business plan?

The Executive Summary

1.0 Executive Summary

Brief but comprehensive synopsis of a business plan or an investment proposal,

which highlights its key points and is generally adapted for the external audience.

Remember the 5 “W”s Who, What, When, Where and Why!

Who? Are you going to have partners? If, so make sure you have a description of who is going to what in writing and have each partner sign it. No Confusion.

What? SFH, Condos, Townhouses, Commercial, Industrial, Duplexes, Four Plexes, etc.

Where? Are you going to put all your eggs in one basket, Las Vegas, or do you have a bigger picture?

When? When are you going to spring into action and make it come true?

How? How are you going to achieve it?

The Goal is to Create… Money $$$ Travel Vacations

Time with Family & Friends Charities / Foundations Retirement

Why is it important to have an entity?

Limited Liability S Corporation C Corporation Many Others

ENTITY STRUCTURING

2.0 Organization of Your Company.

Have a meeting with your Attorney or CPA for advice on how to set up and which entity is right for you.

START UP CAPITAL3.0 SHOW ME THE MONEY!

• Organization of entity and fees• Purchase of supplies and equipment (paper, computer, printer, etc)

• Purchase of property• Cost of repairs• Purchase of appliances if needed• Purchase Marketing Material• Insurance• Business Cards• Closing cost• Misc

How much money is required to begin?

Where will the money come from?• Loan• Borrow• Hock• Partnership

ALWAYS NEEDED• CPA• ATTORNEY• BANKER/LOAN OFFICER• TITLE/ESCROW• INSURANCE AGENT• PROPERTY INSPECTOR• REALTOR• MENTOR/COACH

• CONTRACTOR• HANDYMAN• CREDIT REPORTING SVS• PROPERTY MANAGER• HOME WARRANTY• 1031 EXCHANGE• APPRAISAL• PARTNERS

ADDITIONAL TEAM

RESOURCE TEAM

GOALS

Definition:

Goals describe future expected outcomes, and provide programmatic direction. They focus on ends rather than means.

Example 1:Will have purchased

First property end of 2nd Quarter.

Example 2:

Will have it rehabbed and rented by April 30, 2011

Definition:

Objectives are clear, realistic, specific, measurable, and time-limited, statements of action which when completed will move towards goal achievement. Objectives tell how to meet a goal.

Generally, there are two types of objectives:

• Outcome Objectives - address ends to be obtained

• Process Objectives - specify the means to achieve the outcome objectives (some sources call these “action” objectives,some call them activities to accomplish)

OBJECTIVES

Goals & Objectives

Are You on Track?Total Amount Needed for Retirement

Monthly Cash Flow Needed During Retirement

$3,000per month

$5,000 per month

$7,500 per month

$10,000 per month

$12,000 per month

$15,000 per month

$20,000 per month

Years in Retirement Retirement Amount Needed to Sustain Monthly Cash Flow

5 Years $196,349 $327,428 $490,872 $654,496 $785,395 $981,744 $1,308,992

10 Years $430,072 $716,787 $1,075,181 $1,433,575 $1,720,290 $2,150,362 $2,867,149

15 Years $708,285 $1,180,475 $1,770,713 $2,360,950 $2,833,141 $3,541,426 $4,721,901

20 Years $1,039,455 $1,732,426 $2,598,639 $3,464,852 $4,157,822 $5,197,277 $6,929,703

25 Years $1,433,664 $2,389,440 $3,584,159 $4,778,879 $5,734,655 $7,168,319 $9,557,759

30 Years $1,902,909 $3,171,586 $4,757,273 $6,343,031 $7,611,637 $9,514,547 $12,686,062

35 Years $2,461,725 $4,102,459 $6,153,689 $8,204,918 $9,845,902 $12,307,377 $16,409,837

40 Years $3,126,364 $5,210,607 $7,815,911 $10,421,214 $12,505,457 $15,631,821 $20,842,428

Information obtained from sources other than Broker that

are deemed accurate, but have not been verified by Broker

Information is subject to change. All interested persons

should seek independent legal counsel and or tax advise.

Short Sale vs. ForeclosureWhat you need to know!

ITEM SHORT SALE FORECLOSURE

Fannie Mae GuidelinesPrimary Residence

Eligible for a Fannie Mae insured loan after 3 years, no restriction

Eligible with restriction after 5 years, no restrictions after 7 years.

Fannie Mae GuidelinesNon Primary Residence

An investor who has a short sale is eligible for a Fannie Mae backed mortgage after 3 years.

An investor who had a property foreclosed cannot get a Fannie Mae backed loan for 7 years.

Credit Score Late payments on mortgages will show after completion of the short sale. The effect can be as short as 12 to 18 months.

Depending on how the lender reports it. Credit scores affected negatively 50 to 100 points.

Typically will affect the credit score for at least 3 years. Scores will be negatively affected between 200 and 300 points.

Credit Application Questions (Form 1003)

No question regarding a short sale. Question C, Section VIII: Have you had a property foreclosed upon or given title or deed in lieu thereof in the last 7 years?

Credit History Depending on how the lender reports it, the short sale may not be reported or it will show a substantially better reporting.

Remains as public record for 10 years or more.

Security Clearance A short sale does not usually raise red flags regarding security clearance.

Security clearances will usually be revoked, oftentimes resulting in loss of employment.

Deficiency Judgment This is a negotiable issue between the seller and lending institution.

No negotiations between homeowner and lender. It is up to the lender whether to file for a deficiency judgment.

Deficiency Judgment Amounts

If there is a deficiency judgment, the amount is usually lower and negotiable through the payoffs received.

The foreclosure process usually costs the lender more, hence resulting in a larger deficiency judgment amount if filed.

The Buying ProcessInitial consultation•Define agency relationship•Determine needs and wants•Discuss financial qualifications•Fill out worksheet

Inspection & Disclosures•Buyers approval of Transfer•Disclosures Statement, Preliminary Title Report•Physical & Post Inspections

Renegotiate Price•If critical issues are discovered during due diligence, renegotiate the price!

Homeowners Insurance•Select insurance company & coverage, then give insurance agent escrow information.

Loan Qualification•Discuss Financial resources•Obtain pre-qualification letter

Home Shopping•Tour properties that you consider an “ideal” home while learning about current market values.

Find “Ideal” Home & Make Offer•Discuss appropriate strategies with agent•Make reasonable offer•Review blank contract•Prepare money deposit.

Present & Negotiate Offer•Let your agent negotiate and make the offer at the best prices possible.

Open Escrow•Escrow officer will order Preliminary Title Report and send copies.

Review Title•All title documents are searched and reviewed.

Remove Contingencies

Submit Loan Application•Application to the lender with all necessary documents.

Underwriting & Appraisal•Underwriter reviews files for acceptance.•Appraiser gives value of home

Loan Commitment•Loan is approved

Sign Documents•Loan documents will go to the Title Company.•Sign loan documents and closing cost documents.

Down Payment/Loan Funding•Lender sends funds to Title Company

Record Transfer Title& Close of Escrow•Deed is recorded by County Recorder office•Get keys to your new home!

LIFE of an

ESCROW

Workshop Review

The Benefits of Investing in Real Estate

Plan of Action

The Tax Advantages

Options in Lending

Property Analysis

Thank YouI hope you received a wealth of valuable information to get you on your way to financial freedom.

My 1-on-1 Mentorship Program is availablefor those who are ready to take the next step.

Offered today for just $750 A savings of $250

Some of the Benefits Include: Onsite Evaluation of Property

Springing Your Plan into Action Funding & Documentation

Property Management Bookkeeping

Daily Operations Cash Flow Analysis

And lots more!!!

Dawn Houlf702.236.6266dawn@ShareBuildersInc.comwww.ShareBuildersInc.com

9680 W. Tropicana Ave., Ste. 110Las Vegas, Nevada 89147