Ken H.
Ken was able to expand his real estate career with PMI.
I’ve acquired and managed numerous rental homes in the past 25 years. However, I wanted to venture into the buy, rehab, and sell investment strategy and I felt that I lacked the knowledge and preparation for immediate success. Thus, I was reluctant to pursue that investment strategy.
The PMI real estate coaching program caught my eye. The online interactive training and PMI coaches provided extremely valuable knowledge, insight, and motivation for me to feel comfortable getting into the buy, rehab, and flip game. I completed the interactive training courses and found them to be both informative and interesting; reinforcing the things I knew to be true and providing insight to many new areas where I badly needed information and knowledge. Not only were the online courses informative, the course “action items” prompted me to take action on several next steps which have led me to the success which I enjoy today.
Since joining the PMI real estate coaching program in May 2009, I have purchased four properties and have closings scheduled on my fifth and sixth properties within the next two weeks. I have rehabbed and flipped one property for a $11,100 profit and rehabbed and rented one property for a positive monthly cash flow of $335 per month. The other two properties I’ve rehabbed are currently on the market with an expected profit of $15,000 from one property and an expected profit of $10,000 from the other. My fifth and sixth properties that I am scheduled to close on within the next two weeks should also net profits of about $10,000 each. Not only is rehabbing and flipping profitable, it’s fun. It’s also great to be able to provide members of my real estate investment team with additional income during these difficult financial times.
I spent most of May and June studying the online lessons several times, completing “next steps” and developing a strategy on where my target buying area would be and refining how I would determine my offer price on properties. I worked to increase my home equity line of credit to expedite purchasing homes if needed. I visited the local investment club meeting and made contacts with local investors to find out who in the area I is making loans for rehabbing and flipping houses, and prepared updated financial statements, as well as thoroughly studying the asset protection portion of the course. By mid June, approximately two months after I joined the PMI real estate coaching program, I felt ready to purchase a property to rehab and flip.
I purchased my first property 2678 Barclay Street in July 2009. This was a 3br 2ba home located in a subdivision where I have several rentals. It was listed on the MLS and I spotted it on realtor.com for $35,000. I knew that the value of the house fixed up would be about $82,000. Upon calling the listing realtor, I found out that the house was part of an estate that had suffered fire damage to the kitchen ceiling and cabinets from a kitchen grease fire. Based on my experience with prior grease fires in rentals that I own, I had a very good idea of the costs to repair fire damage. Upon examining the property my estimate to repair the fire damage was approximately $10,000 less than the executor of the estate and listing agent had estimated. The dated appearance of the property plus the fire damage resulted in the property being priced low enough for it to be a viable rehab and flip opportunity. I completed all of the rehab work for $16,000. To date I have a total investment of $51,000 in the property and have it listed with a realtor for $82,500. Upon selling the property, I should earn a profit of approximately $15,000. I actually purchased and rehabbed this property using my home equity line which I had increased during my initial two months of preparation and study.
I purchased my second property 2118 Boykin road in August 2009. This was a 3 br, 1 ½ ba home which was listed at $41,900 for $38,000. I spent a total of $14,900 to hold and rehab the house. I sold the house in March 2010 for $72,000 which netted me a profit of $11,100.
I purchased my third property 2912 Dahlia Drive in September 2009 from a friend. She had lived in this 3 br, 1 ½ ba house for several years and then kept the house as a rental and had actually paid off the mortgage. She recently had gone through some bad tenants and was very frustrated and tired of being a landlord. She mentioned that she wanted to sell the property and get rid of her headaches. I thought about it a few days and offered her $30,000 for the property “as is” with me paying all of the closing costs and her taking back a 15 year note for the entire $30,000 at an interest rate of 5.5%. This was the highest price that I could pay and still meet my cash flow criteria. Much to my surprise, about a month later, she accepted my offer. After purchasing the property I spent approximately $6400 to rehab the property. Although the current estimated tax value of the property is $58,900, I believe the best use for this property at this time is as a rental unit. I currently have a tenant renting the property paying $600 per month rent while my loan payment is $245 per month resulting in a $355 per month positive cash flow.
I purchased my fourth property 2304 Roundup Drive in October 2009. This 3 br 2 ba home was a HUD foreclosure that I initially found online. I worked with my local realtor to submit an offer on the property. I obtained a six month interest only loan for 70% of the cost plus %70 of the estimated repair cost for this property using the second bank contact given to me by a fellow real estate investor that I met at the local real estate investment club meeting. I purchased this 3 br 2 ba home which was listed with a realtor at $54,000 for $49,000. I completed all rehab work for $16,000. To date I have a total investment of $61,200 in this property and expect to sell it for $85,000. Upon selling the property, I should earn a profit of approximately $10,000.
I will be purchasing my fifth and sixth properties in May 2010. The fifth property is 2158 Pepperidge Drive which is a 3br 2 ba bank foreclosure that was listed on the MLS. My realtor spotted this the first day it was listed and I submitted an offer the following day once I had determined my maximum allowable purchase price. I will purchase this home which was listed at $46,500 for $47,300. I anticipate spending approximately $22,700 to hold and rehab the house which should enable me to earn a profit of approximately $9600. The sixth property is 1986 McDade Rd. which is a 3 br 1 ½ ba HUD foreclosure that was listed online. I will be purchasing this home which was listed at $35,000 for $31,800. I anticipate spending approximately $17,000 to hold and rehab the house which should enable me to earn a profit of approximately $10,800. As I have gained confidence, I will purchase these properties using funds from my personal investment account.
I have been building wealth with real estate for years with my investments in rental property. The PMI real estate coaching program provided me with the knowledge, insight, and motivation that I needed to feel comfortable purchasing, rehabbing, and flipping investment property.
You have purchased four properties and have closings scheduled on my fifth and sixth properties within the next (two weeks). EXCELLENT