Checking in with Laura Chiavassa

It’s a rewarding and challenging task to blog about Cliff’s previous students. It’s like trying to follow shooting stars. There are so many and they’re going so fast! Luckily today, I was able to follow up with one – Laura Chiavassa. Laura took a class with Cliff in June 2009 similar to the Mentorlynx 3 Day Real Estate Investment Training Event in San Bernardino at the Hilton from July 30 through August 1. She’s undertaken two real estate investment opportunities since learning from Cliff.

Her story is pretty amazing. In order to understand her situation, I must brief you on her current schedule. She is married, has three children, does appraisals, is studying for her broker’s license, and still found the time and energy to invest in real estate.

She purchased her first property for $58K, invested $17K in repairs, and sold it for $115K. She made $29K in profit. That’s the snapshot of her first deal. Read on for the full story.

I asked Laura a few general questions about her endeavourers. I edited portions of her responses for clarity and brevity. Enjoy! Don’t forget to respond below.

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First Deal: Green Valley, CA
Purchased: $58K
Repairs: $17K
Sell price: $115K
Profit: $29K



JT: Tell me about your first deal.

Laura: I walked away from this house when I was told I needed a septic tank. Then I re-ran the comps and realized I could still make money if I replaced the septic tank so I went back in. The house was pretty thrashed. We replaced the kitchen, the flooring, much of the drywall and texture, removed two illegal additions off of the back of the house and the side of the garage, painted inside and out, and replaced the chimney. We went over budget but were able to sell the house higher than projected. We didn’t need a new septic tank after all.

JT: Did you learn anything?

Laura: I learned to talk to more than one expert in a particular field. The plumber who originally came to check the septic tank immediately said it was bad and needed to be replaced. After talking to a neighbor, I decided to get a second opinion. I found out that there are two sides to a septic tank and that the only way to know if the thing is bad is to check both sides! The first plumber didn't do that. The second plumber said the concrete tank was fine, it just needed repairs. Getting a second opinion saved approximately $6K. Now, if a house is on a septic system, I will always add a septic tank replacement to the cost of repairs to be safe.

Second Deal: Lake Elizabeth, CA
Purchased: $124K
Repairs (Projected): $30K
Sell price (Projected): $230K
Profit (Projected): $76K



JT: Tell me about your second deal.

Laura: We are now on our second project. The multiple listing services stated that the house had various code violations and that it was a cash-only sale. When we first looked at this one, my husband said it was way more work than he wanted to get into. I, being a certified appraiser, thought it was over priced so we walked away. A week later, I saw that a perfect comp on the same street was now a pending sale. According to the agent, it was selling for $100K more than our house! That blew my over priced theory out the door! We ended up getting it for $123,900.

Our projected repair costs are $30K and we anticipate selling it for $230K. We had to get a hard money loan for the repairs so the costs on this one will be more. Hard money is very expensive! My good plumber told me that this one definitely needs a new septic tank. Remember to always add a septic tank replacement cost. I'll let you know how this one turns out!

Contact Information:
Name: Laura Chiavassa
Email: lchiavassa6 at gmail.com

(To protect Laura’s email from auto spam, we used “at” instead of the @ symbol, simply substitute “at” with “@” when emailing her)

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Customer Support
customersupport@mentorlynx.com

951-699-9300






Have you ever consulted multiple experts and received conflicting stories?

Mentorlynx Explores Transactional Funding

Transaction Funding: In short, it’s a one to two day loan. Typically, it’s a one day loan. There are four players in the transaction: lender, seller, buyer, and real estate investor.

Let’s assign names to the players and create a role play.

Lender: Mr. Scott
Seller: Angela
Buyer: Dwight
Real estate investor: Jim

After finishing his ham sandwich for lunch, Jim gets a phone call from Dwight. Dwight recently sold his beat farm and wants to move closer to his company in Scranton, New York. He’s looking for a single story home for around $125K to $150K. Jim tells Dwight he’ll call him back.

Jim starts going over his notes. He suddenly realizes Angela is selling a house that fits Dwight’s needs. She is selling her property for $100K. Jim is excited. Jim calls Dwight back and tells him of the good news. Dwight visits the home and tells Jim he wants it. Jim is elated! Jim tells Dwight he can sell the home for $125,000.

Jim is excited. However, he doesn’t have enough funding to purchase Angela’s house. Jim goes home and starts talking to his wife Pam. Pam can see Jim’s disappointment. This would be an excellent opportunity for them to make some extra cash, especially since they recently had their first child together.

After a few moments of dwelling on the matter, Pam’s eyes burst with thought. She remembers hearing about transactional funding from her coworker Andy. Pam tells Jim to look into transactional funding. Jim kisses Pam and thanks her dearly. He runs to the computer and begins searching for lenders offering transactional funding.

He calls several companies and tells them of his dilemma. Angela has a house for sale that Dwight wants to buy. Essentially, Jim wants to buy the house from Angela and sell it directly to Dwight for a profit. He simply needs the initial investment of $100K to purchase the property from Angela.

Over the course of 10 phone calls, Jim learns that he’ll need to fill out an application along with other documents. The majority of the lenders want four items submitted with the application: a contract between the seller and investor, a contract between the investor and end-buyer, a letter of approval for end-buyer, and possibly an acceptance letter for a short sale. He goes to work on collecting the information. After a few hours, he’s obtained the necessary information from Angela and Dwight, and also filled out 5 applications.

Sleeping is difficult that night. All Jim needs is a temporary loan for $100K. He’ll get the short loan, buy the house from Angela for $100K, sell the house to Dwight for $125K, pay the lending company 3% to 5% on the borrowed $100K, so he’ll end up giving them $103K to $105K back, thus, leaving him a profit of $20K. During the few moments of sleep, Jim dreams of working with a whacky boss in an office that distributes paper supplies.

Jim is sipping his morning cup of coffee reading the “Wall Street Journal” when the phone rings. Mr. Scott, a lender from Dundee Transactional Funds, tells Jim that his application was approved and his company requires a 4% return. Jim bursts with excitement. Mr. Scott tells Jim that the loan is a short-term loan good until the end of the day. That’s what she said, Jim’s wife Pam.

Jim buys the house from Angela, sells it to Dwight, and returns the loan plus interest to Mr. Scott. He deposits his profits of $21K into his bank. He heads home to thank his wife. Without the transactional funding, Jim would not have been able to do the deal.










Have you had any experience with transactional funding?

Sibling Investment Team Debbie and Johnathon Embark on Their First Real Estate Investment Adventure!

Debbie Taylor and her brother Johnathon George took Mentorlynx CEO Cliff Gager's real estate investment mentor class on May 21, 2010. Debbie and Johnathon quickly moved forward with their first real estate investment after the three day training class.

Here is Debbie’s message sent to Cliff Gager on Facebook on June 10:

Hi Cliff, I was in your mentor class in Boston with my brother Johnathon George. I wanted to share with you I got my first investment property offer accepted! I used your spread sheet to check the numbers. The house market value is $150,000 and we are buying it for $86,000. Yesterday we got pre-qualified with a hard money lender and today I got a call saying our offer was accepted! The house needs some rehab work, but it is not too bad. I am excited and wanted to share this with you. Johnathon will be going there today to give the deposit money and the hard money lender is supposed to be calling us back today or tomorrow before lunch for the specific loan we need.

Here is Cliff’s response the same day:

Hurray! Make sure to check the value with an appraiser and condition with a contractor or home inspector! Good luck and keep me posted! I'm probably more excited then you are! Woo hoo! Happy dance!

This is their story told from Debbie:

I started looking on the Mentordvd.Foreclosure.com site for foreclosures in Rhode Island. I started in the Providence County because that is where my brother lives. We thought for our first couple of investments we'd find properties local to him. And I just started going down the list. I called many places. A lot of the properties were all ready sold and were under contract or in negations. I had some Realtors say they'd call me back, but they didn't.

One of the properties I called about was located on Mineral Spring Avenue in Pawtucket, RI. This property was listed for $99,000. I looked at Realquest.com and Zillow and came back with a value of $150,000. Ok, so my starting offer should have been $75,000. Why was it listed so low? Well, I saw it was as an "As Is" sale. What is wrong with it? There must be something major I thought.

Well, I called about it anyway. I talked to the listing agent and I told him I was an investor and he stopped me there. He said, "Well there have all ready been offers on this house in the mid-50s and the bank wouldn’t even consider them." I am thinking ok, then there must be something very wrong with it, but I am going to see where this goes. I offered $69,000 cash. He said he'd talk to the bank and get back to me in a couple of days. In the mean time I was still calling on other properties and getting nowhere.

Two days later, a female called me about the Mineral Spring house. I talked with her and she told me to send her a proof of funds and my offer. I looked up sample offer sheets on line and came up with the best one I could.

I asked the Realtor if she’d be my buyer’s agent. She said yes and that she was all ready my buyer's agent. The property was actually listed with someone else. That must have been the male that I first talked to. So I started talking with her more. Before this conversation, our interactions were very limited. She told me that I had to offer at least $86,000 and I needed a sooner closing date because there were three others putting offers in on it. I didn't believe her. I thought she was just saying this. She told me I was in a good position because I was offering cash but I needed a sooner closing date because it doesn't take 45 days when you are doing cash. I put 45 days because I thought I needed 15 days for inspections and 30 days for closing. I asked if I could have someone look at the place because $86,000 was more then I was thinking. After I had a contact look at the place and he was able to take photos and send them to me, I said ok – $86,000 and 20 days for closing. I guess I could have done less, but this was my first time.

Now I need to find the money! So I went online and started looking for hard money lenders. There were so many! I just picked one and called them. But they were asking questions about me and my situation and not telling me about their business. The conversation didn't go too well. I called another – same thing. I wanted someone who was going to be open about their business so I could know they were real. Then they could ask about me.

So calling random places just wasn't working for me. Then I found a website. The website said there were no lenders listed on this site and I just clicked on some link at the bottom of the page, I couldn't even tell you which one. I filled in my name, email, phone number and what I was looking for.

On Wednesday, someone called me from Real Estate Investing Solutions. I liked talking to him. He told me all about his company and told me they were accredited with the BBB. He even sent me the link to see for myself. He gave me all kinds of information before he asked one single question about me. I liked that! I talked with him for awhile and explained to him that I was really looking for someone on behalf of my brother who was in RI. He said great! We set up a conference call. I called Johnathon and told him what was going on. He was shocked that I did all this. Johnathon was quite pleased.

We spent an hour on the phone so Johnathon could learn about his company and he could learn about us. He said he was going to run our credit reports and would call us back in about 30 minutes. And he did! He told us we were pre-qualified for $300,000-$400,000. Great!

On Thursday, the Realtor called me and told me the bank accepted our offer – I was shocked. I didn't even say anything. She said ‘Are you there, did you hear me?’ Oh yeah I heard her! That was all I said. ‘Well, are you ok?’ I asked again if the bank said yes to make sure. Then I started talking. I was just so shocked. I called Johnathon then got on Facebook to tell Cliff.

Debbie Taylor’s and Jonathon George's contact information:
Email: georgeinvestments at hotmail.com
Phone: 315-921-7876
Facebook Account

(To protect Debbie’s email from auto spam, we used “at” instead of the @ symbol, simply substitute “at” with “@” when emailing her)

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The house is still for sale. They will either sell the house for a quick profit or repair it for a higher profit margin. Check back for more updates!

Ray's and Wanye's Rehab Project

Mentorlynx is excited to blog about Ray and Wayne! Mentorlynx CEO Cliff Gager recently taught the pair at a 3-day mentoring real estate investment class in early April of this year. Within one month they started a rehab project in Hemet, California. This is their story.

We commend Ray and Wayne for sharing their experience. We hope that their story serves as a case study and learning tool for those who follow it. Their adventure into real estate investing also highlights the benefits of taking one of Cliff’s mentoring classes.

We can tell you how excellent Cliff is at teaching real estate investment strategies but we’ll let you decide for yourself. This is a true story by two students that Cliff taught. We plan to follow their rehab project from start to finish and update everyone via blogger and YouTube.

Ray Woll: steele823 at aol.com Cell: 909-534-98644
Wayne Hlebasko: whlebasko at aol.com Cell: 626-485-6811

(To protect their emails from auto spam, we used “at” instead of the @ symbol, simply substitute “at” for “@” when emailing either Ray or Wayne)

Here is the beginning of their story. We encourage you to follow and become a part of the adventure.

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Mentorlynx’s Interview with Ray Woll

JT: Describe your guys’ background.

Ray: We are new to rehab projects. I say new, but that is just in investing and rehabbing. Wayne is a licensed Contractor and I am a licensed Real Estate Broker.
We both have extensive backgrounds in construction; Wayne in residential and Ray in commercial.

JT: Describe your relationship with Wayne.

Ray: My second son Ryan married Wayne’s oldest daughter Ann. We have been pretty close since we met. Wayne worked on some of my projects in commercial construction and Ryan and I did some cabinetry work on some of Wayne’s projects. We both got laid off due to the decline in construction. We talked about the possibility of starting our own company and went ahead with the idea. We started in March of this year.

JT: When did you and Wayne attend a real estate investing mentoring class with Cliff Gager as the instructor?

Ray: Wayne and I attended Cliff’s class the end of March, first of April.

JT: Which part of the class did you enjoy the most and why?

Ray: Wayne and I feel the tour of houses was most beneficial. We saw what was there and heard what Cliff would do. We also feel the spreadsheet that Cliff gave us is very valuable. The notebook with the parts and fixtures listed is a great tool as well.

JT: How did you go about finding this specific property?

Ray: Cliff told us about foreclosure.com. We started using this every day. We used the analyzer and started submitting offers at 50% after repair value. This was not going well as Fannie Mae had become very partial to first time home buyers. While using the site, we became aware of REDC and an auction they were going to hold on May 8th in Ontario, California. Wayne and I decided on a list of 12 properties out of the 62 that would be up for auction. We ran them on Cliff’s spreadsheet and went to the properties. By the time we went to the auction, we had a list of 6 properties we were interested in.

JT: How did the auction go?

Ray: The Hemet property was first up and it went for $82,500 real fast. That was our primary target. We sat waiting for another one of our target properties to come up. About two-thirds of the way through the properties, the Hemet property came back up. We had a ceiling of $70,000 based on our analyzer sheet. We won the bid at $70,000. We had found the value to be between $140,000 and $150,000. Thus, a maximum bid of $70,000.

JT: What are your plans for the rehab project?

Ray: We will be removing all fixtures, cabinets, doors, carpet, and tile. We will retexture the walls and ceilings; replace all doors, cabinets, restroom fixtures, and kitchen fixtures. The inside and outside will be repainted, and new carpet and tile installed. We will also replace the landscape with grass, trees, and shrubs. The fencing will be repaired.

JT: Any obstacles yet?

Ray: We purchased the property on a two week escrow, but Fannie Mae is not so quick in signing documents. We are still waiting for escrow instructions to be returned to escrow. We are anxious to get going. We have another property under contract, but we are pushing it back, as we can only do one at a time.

JT: Any other information for those following your guys’ rehab project?

Ray: We have elected to do the work ourselves on these first properties for the sake of firsthand experience and to build up the bank account.

JT: Did Cliff’s real estate investment training help you?

Ray: Wayne and I were not sure we could make this happen, but after attending Cliff’s 3-day seminar, we were certain that we could do it if we worked hard. Having Cliff come and look at the Hemet house was very important to us, as we then realized that we had made the right plans for the work to be done. Thank you.

JT: No thank you Ray!

Here’s the first update on YouTube. Stay tuned for more blogs and videos on Ray and Wayne’s’ rehab project.



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Mentorlynx
Customer Support
customersupport@mentorlynx.com
951-699-9300

So do you have any rehab project stories you'd like to share for everyone?

Mentorlynx Analyzes Special Code Enforcement Teams Created to Combat the Aftermath Created by Foreclosed Properties

It’s no surprise that foreclosed properties can wreak havoc on property values. More often than not, foreclosed properties are not kept up to par. The neglected properties also create a ripe environment for unwelcome guests. Some counties and cities have created new or revamped previous legislation to remedy the negative effects created by the housing crisis.

Riverside County formed a special code enforcement team in 2008 to combat the sharp increase of foreclosures. County officials also revamped city codes in 2007 when reports came in that foreclosures had increased 350% from 2006. Press-Enterprise Reporter Alicia Robinson stated that new codes changed the definition of property management to include vacant properties as well. In extreme cases, owners may be fined $1,000 per day. The special unit handles roughly 110-150 open cases at a time with weekly or biweekly visits to the abandoned properties. Full Article

What does this information mean for investors?

The first thing that comes to mind is the $7 million that has been billed to owners by the county. If a seller is not accepting my offer because they think it is too low, I will bring up the fact that the longer they wait the more it will cost them. Not only will the vacant property become less valuable over time due to neglect, but the county will start imposing fines which will cost even more. If the seller is paying to upkeep the property, then these expenses will only eat up any additional money they may receive on any future offers higher than mine. Secondly, if I am an investor that has not looked at Riverside County before, I should now.

- Mentorlynx Mentor and Trainer Eric Von Heal

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Have you had any experience with fines being imposed on a foreclosed property? If so, we’d love for you to share your experience.

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Mentorlynx
Customer Support
customersupport@mentorlynx.com