Realty411 Magazine A Spotlight on Charles and Lena Sells | Page 44
This year, The PIP Group
introduced two new models and
opportunities:
1. The 16% Promise on our Fix
and Flips, Passive Turnkey
Solution
Notice I said “promise” and not
“guarantee.” That is because in
the 20 years we have been doing
this and over the thousands of
transactions we have done, we
know stuff happens that can be
entirely out of your control.
Hurricanes happen. Tornadoes and
floods happen. Attorneys handling
the foreclosures and
documentation screw up – it all
happens. A good coaching
program, or a reputable service
provider can help mitigate the
“stuff happens” scenario. With our
16% promise, we are confident we
are going to take a right hook to
the chin a few times (on behalf of
our client) to earn that 16%
promise, but we are also equally as
confident we will make it up on
the other 9 out of 10 deals that are
in far excess of 16% in
performance.
2. The “Guru Rescue” Model
Guru Rescue is available to any
investor, but was initially created
to service the needs of so many
investors who came to us after
being bilked out of opportunity
due to heavy upfront fees, or
shortfall coaching, without real life
experiences. For the last 4, or 5
years about 10% of our clients
have come from just such
scenarios. Another 10% come
from reputable coaching programs,
but come to realize there is a lot of
work to investing in distressed real
estate and decide they don’t want
to do it themselves (after they have
spent upwards of $50k in coaching
programs). We needed a model
that would keep these folks from
having to foot a single dime, until
we perform on their behalf. Guru
Rescue means no upfront fees, no
upfront expenditures whatsoever,
until the investment performs –
period.
Q. How do you do approach due
diligence to find real value and
buy right?
Due diligence varies on state
and legislation, as well as the type
of auction we are bidding in.
Every state has its own set of
legislative requirements and every
county within that state has its
own interpretation as to how that
requirements translate to policy. To
try and keep this simple, let’s
break it down to two different
investment types:
A. Investments in tax liens with
a high likelihood to redeem: Due
diligence is going to be far more
data driven than actual physical
inspections of the collateral
property. Investors
are going to be
looking for past
years
delinquencies, did
they payoff
(redeem), and if
there has been
significant change
in assessor values,
etc.
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B. Investments in tax liens, or
fix flip auctions where you
acquire the deed quickly: Due
diligence is going to be a
combination of data and physical
inspection. Investors are going to
determine the highest bid, based
on the assumption they are going
to own the collateral property and
the occupant is going to do as
much damage to the place as they
can, on the way out. You cannot
get inside to do an inspection,
before most auctions, but you can
get an idea of what lies inside,
based on the outside.
Q. Given there may be additional
costs to cure and take over the
property beyond the face value of
the acquisition, how much
should investors have to invest or
in reserves?
Currently, The PIP Group
offers passive investor services in
distressed real estate, under 5
different categories:
1. Tax liens
2. Secondary market tax liens
3. Predeed tax deeds
4. Traditional foreclosure (fix
and flips)
5. Cash flow holds