| I have covered many aspects to creating an | | | | while. You've got a real estate license. |
| effective business plan. Here we can discuss | | | | Student: I also build software for home builders and |
| questions that have been asked by some of my | | | | pool builders. |
| students with regard to developing a business | | | | Michael: If you're getting bulk packages of REO |
| concept as well as other miscellaneous related | | | | buildings through banks or wherever, you're getting |
| questions. | | | | unique insight to packages. Obviously within those |
| Acquiring Bulk Packages of REO Buildings | | | | packages are a bunch of dogs, but there are some |
| Michael: What is your general business plan? | | | | gems in there. You've got the ability to pick those |
| Student: Mine is just wholesaling of the bulk REOs | | | | off before other people do. |
| that come in. It's my way of possibly being the | | | | Student: That's right. That's why I need to have the |
| realtor and listing that property that's here in Arizona. | | | | private lender money to cherry pick. I'm not so much |
| I'm just trying to cover my bases. If we get some | | | | into rehab because I grew up on a farm and I hated |
| bulk REOs in that if a buyer doesn't bid on it I can | | | | every minute of it. I'm not really into the dirty stuff. |
| possibly have some private lenders to maybe put | | | | If you can tell, I'm doing software and real estate |
| together and buy those bulk REOs. | | | | and not into the rehab part. That's why I'm more into |
| If I get someone who has a large amount of money | | | | the wholesaling part of it. Maybe if I acquired it I |
| - millions of dollars - a lot of these bulk REOs are $10, | | | | might do the rehab part. If I got a team like what |
| $50, $100 million dollars. | | | | you said, of people I could trust of electricians, |
| Michael: These are banks that are giving you these | | | | plumbers, that kind of thing. I don't have that core |
| packages? | | | | team. If I did, then over time I might do the rehab. |
| Student: Exactly. | | | | I know you said at the beginning you were thinking |
| Michael: You're not purchasing them; you're acting as | | | | don't do the wholesaling right now. One thing you did |
| an agent to sell them? | | | | say is that the prices are low enough to do |
| Student: Well, no, we're just a go between right now. | | | | wholesaling. |
| We get them and we give it out to other private | | | | Michael: The problem with wholesaling is not getting |
| lenders or whoever has the money in that area to | | | | them at a cheap price. That's not the issue. There |
| buy them. | | | | simply aren't many investors right now that are going |
| I was looking for another possibility of my being able | | | | to want to take it off your hands like a couple of |
| - if there was an Arizona portfolio - that once that | | | | years ago. You have to be careful. I just think that |
| person bought it, I can become the realtor to sell | | | | model right now has some difficulties. |
| them, and at the same time I might want to | | | | Buy and hold makes a lot more sense right now. You |
| purchase some of those with private lender funds. | | | | can buy cheaper and convince sellers to provide seller |
| That's my game plan right off hand to fill in the gap | | | | financing at extremely attractive rates and terms |
| of any Arizona portfolios that come through. | | | | you couldn't dream of a few years ago. |
| Michael: Just talking with you first of all I have a | | | | The buy and hold model is very solid right now. You |
| sense that you know what you're talking about. | | | | can buy and hold for two or three years and let the |
| You're pretty bright. You have some skill sets that | | | | market recover. The mortgage market will return and |
| would make you very attractive to potential private | | | | then the investors are going to return. |
| investors. It sounds like you've been in this business a | | | | |