The Coach’s Corner
Dr. Tingley mentors students & helps them achieve success
In Memory: We regret to inform readers
that Dr. Richard Tingley passed away in
early August.
H
i everyone! I have been involved
in real estate for the last 30 years
and I have been coaching for the
last 16 years. I have coached for Carl-
son Sheets, AD Kessler, Robert Allen, Al
Lowry, and most recently for Armando
Montelongo. Each program was unique
depending upon how the “guru” wanted
his material presented.
I have really enjoyed my time with each
of these individuals and over the years
have picked up many great ideas.
Today, I want to talk about how to buy,
fix and flip a house. I would like to focus on
the formula to choose a home you wish to
buy, fix and flip. The first thing is to know
what the home will sell for, once it’s fixed
up. When I go out with a REALTOR ® to
look at a property, I ask them to provide
two or three comparables for each of the
properties I am considering. The compa-
rables should be just normal properties, not
REO or short sales. Once I look at the com-
parables, I will generally do a formulation
like this:
Once we get the 70% price,
you subtract out the cost of re-
pairs and the cost of getting a
hard money lender.
I will take 70% of the comparables. I do
know that most lenders wish to loan 65%
but your chance of getting a property at
65% are slim to nil. Once we get the 70%
price, you subtract out the cost of repairs
and the cost of getting a hard money lender.
What is left is what you can safely pay for
the home. Presenting this offer works best
when you are making it on a bank-owned
property. You have to take the rehab cost
and the cost of the loan into consideration
so that there is a profit margin for you.
For example, let’s say the after repair
value (ARV) is $200,000. The REAL-
TOR ® has shown a few comparables to
confirm that the home we are looking at is
worth $200,000.
Here is an example:
200,000 X .70 = $140,000 minus
$20,000 for rehab cost (The typi-
cal cost of minor rehab).
Take this $120,000 subtract $14,000 for
hard money costs = $106,000.
This is what you would typically pay for
the house.
To purchase Dr. Tingley’s book or learn
more about his legacy, please visit:
www.RealEstateInvestorsStore.com
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