Jdig education presentation

Building Wealth

Distressed Real

Estate

With

Skyline Properties, Inc.

Liberty CapitalJD Investment Group

Introduction

JD Investment GroupSkyline Properties, Inc.

Liberty Capital

Rylen AkanaBroker, Investment

Specialist

Rich D’AgostinoBroker, Investment

Specialist

JD Investment Group

Questions to Ask Yourself


Liberty Capital

Why are you here?• Curiosity• Take action to start investing• Build financial security

What do you wish to gain?

• Confidence in real estate investing

• Knowledge• Trust & Security

Why JD Investment Group?


Liberty Capital

Full Service Team• Information database• Financial backing• In-house rehab contracting services• Property management services

Industry Knowledge• Years of investing success & rehab

experience

Trust & Integrity• Must be built … let us show you.

JD Investment Group

Trust & Integrity


Liberty Capital

One of the great lessons taught by my Father:

“NEVER MESS WITH A MAN’S WALLET!”

JD Investment Group

Real Estate Investing 101


Liberty Capital

Investor Mind-Set• UGLY homes are great!

• Think long-term

• Know your market

• Understand the risks

JD Investment Group



Liberty Capital

Ugly Homes are Great!• Some of the best returns come in

moderate to average neighborhoods

• Don’t be afraid of a little work

• Know the area demographic

JD Investment Group



Liberty Capital

Think Long-Term

• NOT a “get-rich-quick” business

• Every deal is not a homerun

• Careful and Methodical wins the race

JD Investment Group



Liberty Capital

Know Your Market• Be cognizant of market trends

• Where are the first time Homebuyers buying at

• Choose to invest in areas where the median family income can buy

JD Investment Group



Liberty Capital

Understand the Risks• The only guarantees in life are

DEATH & TAXES!

• Treat real estate investing like a business

• Don’t let pride cloud your judgment

JD Investment Group

Flipping: The Pros & Cons


Liberty Capital

Pros:• Quick in-and-out investment.• Return on Investment of 30% or more (in 4 month

or less period).• Easy to qualify for bridge loan to purchase at

auction 15% down.• Only 2% for hard money (as opposed to industry

standard of 5%).Cons:• Need larger margin than rentals and can

sometimes be difficult to win at auction due to competition.

JD Investment Group

Why Rentals?


Liberty Capital

• The rental market is hot right NOW! Take as much advantage of it as possible.

• Less risk, with higher long-term returns

• You will cashflow now, gaining monthly income (with up to 10 homes, $3,500 to $6,000+ per month)

• Hands off- Passive income (Property management takes care of all tenant needs and hassles)

• You will build equity into the homes

• Future sale of homes will bring large payoff - much larger than flipping now

JD Investment Group

Why Rentals? (Continued)


Liberty Capital

• We can structure the deal so you can either: a. Get your down payment back, or b. Apply their down payment towards the fix up

costs, so no further money comes out of the buyer's pocket after purchasing.

• You will win more bids and buy more homes, since we don't need as large of a margin as flipping

• Tax benefits (Depreciation, interest write offs, etc)

• We've leased out over 100 homes in the last two years, so there is 100% confidence that any home a client buys will be rented out within 45 days after fix up is complete to get you into buying another one and building a portfolio."

JD Investment Group

Equity



Why Foreclosures?


Liberty Capital

Pros:• Great deals, sometimes 70% of retail price or less

• Hard money loans easy to get approved for (based on property value)

• Immediate ownership after auction

Cons:• Not always able to see inside of the home before purchasing

• Need 18% cash at time of purchase

• If owner, 21 days until possession. If tenant, 60-90 days until possession or cash for keys

• No contingencies, once purchased it's yours!

JD Investment Group

Foreclosure Process


Liberty Capital

Notice of Default Auction

Postponed

Sold to Bank

Sold to 3rd

Cancelled

Trustee’s Deed

90 Day

s Notice of Trustee

Sale

30 Day

s

90 Day

s

JD Investment Group

Foreclosures Process (Cont.)


Liberty Capital

Notice of Default

90 Days of missed payments to your loan

servicer

While the homeowner must receive a “Notice of Default”, it is not commonly recorded in Washington state, and therefore not tracked in foreclosure radar. RCW 61.24.030

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Foreclosure Process (Cont.)


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Notice of Trustee

Sale

Trustee sets auction date.

Recorded at least 30 Days after the Notice of

Default.

RCW 61.24.030(7)

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Foreclosure Process (Cont.)


Liberty Capital

AuctionInitial auction date. At least 90 days from the Notice of Trustee Sale.

RCW 61.24.040(1)(a)

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Foreclosure Process


Liberty Capital

Auction

Postponed

Sold to Bank

Sold to 3rd

Cancelled

Sale occurs on Friday.

RCW 61.24.040(1)(a)Sale occurs on a

Friday.RCW 61.24.040(5)

Auction may be postponed for 120

days.RCW 61.24.040(6)

JD Investment Group

Foreclosure Process


Liberty Capital

Transfers property to the highest

bidder.Possesion granted 20 days after the sale.

RCW 61.24.060(1)

No deficiency judgment.

RCW 61.24.100

Trustee’s Deed

JD Investment Group

Example Rental - Kent




Liberty Capital

Kent Duplex

Purchased for $105,000

Fix up $7,000

Monthly Payment (P.I.T.I.) $900

Rented for $1,700

Net Cashflow/ month $800/month, $10,200 per year

Equity $40,000

JD Investment Group

Example Flip- Everett



Example Flip- Everett (Cont.)




Liberty Capital

Everett Flip

Purchase Price $42,100

Fix Up $15,000

Sale Price $84,950

Net Profit $20,000

JD Investment Group

Investment Resources



Preferred lending partner

In-house professional leasingand sales team

In-house construction for rehab

JD Construction


Professional propertymanagement services

Real Estate & Property Management

Bridge Loans


Liberty Capital

Through our preferred lender partner …

Your Real Estate Lending Partner

JD Investment Group

What is a Bridge Loan?


Liberty Capital

Because you need to pay at the time you purchase a property at the Trustee sale, it is impossible to secure a conventional loan.

Hard money financing, or “Bridge” loans make it possible to secure auction properties for a short term.

JD Investment Group

Bridge Loan Terms


Liberty Capital

Loan Requirements:

• 1st Lien Position• LTV =<75% of Current Market

Value• Viable Exit Strategy in Place

Standard Loan Fees:• 2-4% Origination Fee• 10-12% Interest Rate• $695.00 Administrative

Fee• Up to 12 months

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Understanding CMA’s



Proforma – How does it work?



Proforma – How does it work?



Important Steps before Purchasing:


Liberty Capital

Member Agreement signed Filling out loan application Approval for hard money if flipping Approval for hard money AND

conventional loan if holding

JD Investment Group

THANK YOU!


Liberty Capital

Open for Questions?

JD Investment Group

Documents

Jdig education presentation