Turning Trash Into CASH!
A Guide to Creating BIG Checks By Buying, Fixing, and Selling Real Estate!
-From the Desk of Jason Loucks
Would you like to know how you can use most people forget, is there are a lot of costs
very little money, to leverage houses that once involved in selling properties for full retail, and I
you’re done fixing them will be worth far more want you to see what kind of profits you can
than what you paid for them? really expect if you decide to do these types of
I’m talking about rehabs. I’ll show you
how to do it inexpensively, and how to do it for I’m showing you the next step in your real
maximum profit and with minimal risk. estate career, once you get started in the
wholesale business, you get a little time under
I’m going to show you step by step how to your belt, and you get a little comfortable; I’m
find them, how to negotiate once you’ve found going to show you how to start making those big
them, and where to get the money to buy them profits that you’ve been wholesaling out to other
I’ll also cover how to fix them quickly and For most people, for the vast majority of
inexpensively, and how to sell them. people, (myself included) finding the key to
making quick money in real estate really made
In fact, selling properties is the hardest part the difference. Without those wholesaling checks
of this business when you don’t know what coming in on a regular (at least monthly) basis, I
you’re doing, and the easiest part of the business couldn’t get and stay in Business. I would have
when you do know what you’re doing. What
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had to “cash in my chips” and get a job- and I
wouldn’t wish that fate on anyone! First and foremost;
Those wholesaling checks, that $5,000 I absolutely forbid you from fixing any
minimum check coming in, (I’m going to try and property yourself.
get you to increase the size of that check with a
little training) each and every month (or even Replacing busted up wood, replacing or
week) is really what allowed me to make my real fixing water damage, painting houses, these are
estate investing career skyrocket because I could just not things that a successful Real Estate
afford to stay in the business. If you want to Business Owner does.
know more about the fastest and easiest way to
get in and stay in business, check out the Fast If you like to do those things, great, get a
CASH Quick Start Workshop. It’s the manual for job doing it, and then in your part time real estate
starting your own highly profitable Real Estate business, make real money by getting someone
Business, without cash, credit, or partners. else to do it for you for a lot less than you’re
willing to work for.
And once you’re in business and you have
your bases covered, the next logical step for you Remember, this is the next stage of your
to take, once you get used to making “Fast Cash” real estate career after you get wholesaling taken
finding bargains and passing them on to bargain care of, because without the foundation of how to
hunters, is rehabbing them for big pay days. find these great deals, without the foundation of
how to pick up properties dirt cheap because you
I like to call it “Buying and Fixing”, know how to negotiate, without knowing what
because I think the word “rehab” has some kind of property should you be looking at, and in
connections to it that a lot of people don’t really what areas, none of this makes any difference.
How to find properties
Things like a lot of time and effort, and too
much money out of pocket. On top of that, most How do you find these Junkers, how do
people can’t or don’t want to fix anything. Well you find these great low prices on properties that
guess what, you won’t be. make sense for you to buy them?
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quickly sell, and the fastest market is houses with
Here’s what I want you to do, take your a price tag of about $180,000 and less.
camera, if you are lucky enough to already have
a camera, if not go to the convenience store and That being said, you can be in the $80,000
get one for about $7. market or you can be in the $180,000 market and
make twice as much money for the same amount
Then drive to an appropriate low priced of work. Which do you think I prefer?
neighborhood. Here is what I mean by that.
There are some very specific reasons why I
You don’t want to be where the people are picked that price range, not the least of which is
trying to sell you drugs. Not one of those really that the FHA loan limit is about $160,000. Now
bad high crime rate areas. You just want to be in what that means is borrowers can borrow
the low end neighborhoods, the pickup truck $160,000 towards a house. Doesn’t just make
neighborhoods, is what I like to call them, where sense that if that’s what the majority of
people who can qualify for loans to buy houses borrowers can qualify to buy, that’s where you
want to live. should be rehabbing?
Right now in South Florida our median It makes sense to me and it’s made some
home price is about $240,000. So what I like to fat profits for me to.
look for is properties under that price when they
are in perfect condition. In fact, I prefer So I want you to look in neighborhoods
properties that will retail for $180,000 or less in where the perfect house, the best house, the nice
perfect condition. fixed up house, sells for around $160-$180,000.
This is how you get started quickly. When Get in your car and drive to that
you get into rehabs you start to see the neighborhood, better yet get someone else to get
tremendous opportunity, and a lot of those in their car and drive through that neighborhood
opportunities are on much higher dollar houses. for you. What you want to look for is two things.
But when you’re starting out, it’s very important
that you buy houses that you can quickly fix, and First of all you want to look for any houses
what need significant work, and when I say
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“significant,” I don’t mean that the lawn is a little What you’re looking for are true Junkers.
long, although that could be a good first step. You want properties that have some sort of
serious reason why no one (except you) is
I’m talking about a house where the front interested in buying this house. Let me tell you-if
porch is caving in, or a house where there is you’ve never been the only person making offers
serious water damage on the outside of the on a vacant, ugly house, it’s a whole new ball
house. A house with a bad roof or cracked game, you’ve got a seller who for one reason or
foundation is great! If there is water damage on another has let the property get into disrepair,
the outside of a house you know that house needs and if it’s also vacant, you’ve got a great, great
your help! lead on your hands.
For us, rotten wood or nasty smells equal On top of that, if a house needs significant
Dollar signs, but for that home owner, it’s work, none of your so-called “competition can
trouble. Maybe the roof is old and ratty, maybe get a bank loan to buy it. You’ll be the only
the lawn might be three feet high, maybe the game in town.
house is boarded up. If so, great! Boarded up
houses are a goldmine! The easiest way for you to buy houses is to
find vacant ugly houses, contact the sellers and
Some of the best deals you’ll ever find are start making offers.
vacant houses. In fact when I send my bird dogs
out, when I send people out to take pictures of Making this BIG Business
neighborhoods for me, any vacant house gets my
attention. I’ve found that vacant houses almost The best and easiest way to take your
always have motivated owners, and a lot of those rehabbing business to the next level is to have
motivated owners have already packed up and someone else go out and take the pictures for
If a person is willing to pack up and leave a Hire someone else for $7 or $8 an hour,
house, don’t you think there’s a great opportunity somebody with a camera, to drive around and
for a deal there? take pictures of vacant ugly houses for you and
just jot down a few notes about the condition of
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the house. Teach them to take a picture and a few If you have to put out $50 or so to your
notes about the houses- the address, and if Bird-Dog, and you only make $25,000 or
possible the owner’s name. $50,000 (your minimum profit on a rehab is
$25,000 each), is that really so bad?
Check the tax records to find the Owner of
the property, and call information or check the Here’s an idea- what if your bird dog did
phone book to get their phone number. this for you once every week, or even every
single day? Just a thought…
Call them and see if they’d like to sell their
house. Simple, huh? When you’re negotiating with the Sellers of
Junkers, the number one choice for buying
Let’s say your “bird dog” went and found properties is cash offers. Cash offers with no
25 houses for you in one day. That’s 25 contingencies. Cash offers with none of that
addresses and phone numbers of 25 sellers with goop like “and/or assigns, subject to appraisal, or
25 vacant ugly houses. subject to partner’s approval”.
After making your calls, you will get down That’s a bunch of seminar CRAP!
to about three who have all the pieces of the
puzzle, and are ready to sell right away. The rest Don’t do anything to give your Sellers the
will come around to your way of thinking if you idea that you’re trying to back out of the deal, or
give them time and stay in touch. So focus on the that you need an escape clause. You will kill
best three for now and let the others cook a your deal before it even starts.
while. I’ll cover follow up in an upcoming
article. I want you to make cash offers. Cash on the
barrel head, where you walk in and say to your
Now you’re probably not going to close all seller, “I know the area already, I’m comfortable
three, at least not yet. I haven’t taught you how with the value of the house, and I can pay you
to negotiate, but you will have a great chance at “$X cash for your house.”.
closing one or two.
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You don’t have to be to the “T” exact on It may only come down $2,000 or $3,000
your value estimate, because your offer is going right? That’s ten seconds to make $2,000 or
to be low enough to leave you a little bit of $3000. It’s probably the most productive thing
flexibility. you’ve ever done in your whole life. I can’t even
imagine the hourly rate on $2,000 or $3000 on
You want to be upfront with them, and if ten seconds.
the price on the house doesn’t make those little
hairs on the back of your neck stand up and get Once you’ve negotiated a good price, you
you all excited, don’t do the deal. have to be able to fund your deal, right? And
you’ve got to be able to conserve as much of
If you’re not excited by the price, and even your own money as possible, for contingencies
a little embarrassed by how low your offer is, it’s or because you don’t have any money.
not worth it anyway. It’s just going to be more
headaches. Chasing after deals that aren’t really Relax! Lots of people do this with none of
deals is a nail in the coffin for the vast majority their own money- it’s normal.
of real estate investors.
It doesn’t make business sense to put all of
Negotiating with a Motivated Seller is your cash into a deal.
really simple; it’s just a simple back and forth.
Whatever number they come at you with first, How many deals could you do with
simply take 10 seconds and think about it. $100,000? Well if you’re doing a deal with little
or nothing down, you can do a lot of them. But if
Try it out- you’ll see that silence is you do one $100,000 all cash deal, you’re done.
uncomfortable. When the Seller hits you with a Until you get that house sold you can’t do any
price just take 10 seconds and let them think more business!
about the price they just gave you, before you
even respond. Maybe scratch your head a little So where do we turn? No bank is going to
bit, look down at the floor, whatever you need to give a loan on a house that’s in this type of
do, but just keep your mouth shut and nine times condition right?
out of ten that price comes down.
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You’ve got two choices- find a Hard Even if you have to pay for the repairs,
Money Lender, or get your own Private Lenders. you’re talking about a $5000 investment to make
a $30-$40,000 profit. Not bad.
Hard Money lenders are Investors who love
to lend money on houses that need serious fix up. But I prefer your second choice. With
There are a lot of them. Check your local Private Lenders, it’s much, much better. Private
newspaper under “Money to Lend.” Lenders are just regular people who, instead of
putting their money in a CD or Mutual Fund and
They only lend 65 or 70% of what the making tiny little returns, choose to lend you
house is going to be worth, once you fix it up. their money to buy, fix, and sell houses.
What’s important to remember is that they’ll lend
to the After Repaired Value, NOT what it’s There is only one stumbling block to
worth in it’s present condition. Private Lenders- you have to ask! And you
have to ask the right way!
It cuts down significantly on the capital you
have to put in, and if you’re buying this house for But the rewards for your bravery are many
65 or 70 cents on the Dollar, what’s your fold-
1. As soon as you pay them back, the money
You’re going to have to pay some pretty is ready for you to use again!
steep interest rates, right now I think it’s about
12 or 13% interest, plus 3 points (each point is 2. The interest rate will be whatever you can
1% of the loan amount as an upfront cost). But if afford to pay that will also get them excited.
you’re only paying that interest for a couple of Rates of 6-8% are not unheard of, but I like to
months, what difference does it make really? offer my lenders at least 10-12%. (The difference
is minimal to me, but I just love when my lenders
Two months is one sixth of a year, and one get all excited and beg me to borrow their
sixth of 12% is 2%, so what if you pay 2%? You money! Try getting that from a bank! To make it
only had to pay that interest for two payments. even better, after they’ve made money off of me
a few times, they tell everyone they know, and I
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have tons of people who want to give me their Now that you know how to find and buy
money!) these houses, you need to know how to price
repairs. You can’t make an offer until you know
3. There are no rules! As long as the that.
investment is safe, you can use Private Money
however you like. I like to use a Private Money It must take some college level education,
Second Mortgage when I take over existing loans must be some kind of intensive four semester
Subject-to. thing you could probably pay someone $20,000
to learn, right? I mean you gotta call your
4. No approvals. As long as the deal is a fit accountant don’t you?
for the investor, you’re good to go. You can
close deals in Days, not weeks or months. This No.
gives you the unprecedented ability to get great
deals. You can borrow against homes in good or If you are working on a median price range
bad condition. house, just about everything costs the same from
house to house. If you pick one really nice
Getting your own group of Private Lenders bathroom vanity over one that’s not so nice,
is top priority for anyone serious about this you’re talking about a $20 or $40 difference. If
business. To learn more about how to get all the $20 or $40 is the difference of you making or not
money you could ever need in your Real Estate making a $30,000 profit get the good one!
Business without ever going to the bank, make
sure you attend the upcoming Rehabbing/Private Here’s how I price repairs. It’s going to
Lending Workshop. It will put you in business take me the whole of about 30 seconds to tell you
overnight, and set up a lifetime of profitable and every price on a property.
low risk investing.
Number one, carpet and tile:
How much does carpet cost? With pad,
Pricing Repairs installed, $1 a square foot. ($1 a square foot for
the carpet) X (how many square feet of carpet is
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in the house) = how much it’s going to cost to That includes a brand new roof installed,
replace the carpet. new soffets, new fascia, new vents, everything
brand new right down to the plywood. It’s that
Tile is $3 a square foot, not for the whole simple. $3 per square foot is what it costs.
square footage of the house, just for the part
that’s tile. If you want to replace tile that’s how That’s a really easy way to get in and figure
much it’s going to be, $3 a square foot, it’s just out what your repairs are going to cost to get the
that easy. house in top shape. Remember, all you have to
be is close. There’s no chance you’ll ever be
If you need to redo a bathroom, it’s $1,500. right!
Don’t be Cheap!
I’m not going to price out every little tiny
thing. If I don’t have to replace the tub great, You need to get the work done as quickly
maybe it’ll come in at $1,000 but I can’t bet on and economically as possible. And I don’t mean
that, so $1,500 it is. cheap!
Need a new kitchen? $1,500 gets you all One of the things I will warn you is:
new cupboards, new sink, all new everything,
except for the tile of course and any appliances. NEVER DO A CHEAP REHAB JOB!
You might have to price those separate. I don’t
always put appliances in my houses. New You’ll MORE than pay the difference in
kitchen: $1500. headaches when you try to sell the house!
Need some light fixtures? $50 each. Count Never skimp on the little extras that your
them, how many are there, six? $300. buyers are going to notice. I have some great
techniques on how to save you money on rehabs
For a new roof, use $3 per square foot of that won’t compromise the quality of the work.
the house. If you have a 1,500sf house, it’s
$4,500 for the roof. Let me give you an example. Have you
ever gone past Home Depot and seen the gallons
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of paint that just weren’t the right color? The I get the whole interior of a house worth of
“oops” paint? They have them in every type of paint for $45. And I don’t care what color it is as
hardware store. long as it’s nice looking and neutral.
I have eight jugs of “oops” paint, and I Now if I went and picked a color and I
don’t even know what house they’re going to go matched it, it would cost me about $100 per 5
into. The reason for that is whenever I find a gallon bucket.
color that would be a lovely color for a house, I
pick it up for a song- usually $5-$15. Money saving “tricks” like these separate
the wealthy from the struggling in the Rehab
So I have these jugs of paint that I bought business. In fact I’ve rehabbed houses that
for $15 (that’s 5 gallons of paint for $15). people told me were going to cost $40,000 for as
little as $10,000.
If I pick my color what color am I going to
pick? Well gee, I don’t know, I haven’t bought It doesn’t happen every time, but it’s not
the carpet yet, I haven’t bought the tile yet, I rare either. Remember, I love structural work, I
don’t know what color it should be and more love having to put a new roof on, because I’m the
specifically I don’t care! only game in town when it comes to buying that
So I take all the neutral colors like the tans,
off whites, maybe a little bit of pink, colors that I In the upcoming Rehabs course, you can
think would be nice, and I’ll figure out how learn; how to prep the house, what you have to
much it’s going to take to paint the whole house do to sell quickly, and where we spend the
(usually a whole interior will be about 10 money and where we choose not to. It’s really
gallons). that simple. I’ll share with you all the tips and
strategies I use to cut my rehab costs in half.
Since it comes in 5 gallon jugs, it’s going to
be 5, 10, or 15 gallons. I’ll use a little extra to be Selling Your Deal
on the safe side, so I’ll take three of those and
mix them together.
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When you go to sell that house you have to
understand that there are a lot of costs involved My side of the closing costs are going to
on your end to sell it. cost about 3%. Remember I said 1-3%? Well I
don’t bet on one, I go right to three. So right off
They break down into three categories. the bat 9% of the value of my house is gone in
First of all, you have to set the price correctly. the efforts to sell it.
That’s not much of an issue, because you’re
pricing a house that’s in great condition in the You should also have 3 or 4 months worth
perfect neighborhood and your house is now the of payments on underlying financing- the Private
nicest house on the block because everything is Money or the Hard Money loan you got to buy
new, everything is painted, and everything is the house. So in addition to your rehab costs
clean. you’ve got 6% off the price for sales costs, 3% to
close it and 3 to 6 months worth of loan
Your price can be a little bit above the payments, plus electricity, water, and any other
other houses in the neighborhood. You can’t go utilities like Swimming Pool Cleaning Service or
crazy with it, but I like to go about 5-10% above Lawn maintenance. Make sure you remember to
whatever the comparable sales are. add these costs when getting the money to buy
Whatever price you use, assume 6% of that
figure is gone. You’ll either sell through a In order to get the most money out of my
Realtor, or sell it yourself and pay the same house and to get my houses sold fast, is learn the
amount in headaches from helping your buyer ins and outs of all the low and no down payment
with closing costs, getting low ball offers from programs like FHA, VHA, and sub-prime
every idiot, or just having to cut the price to get lending to get my house sold fast. I can simply
some attention on the property. run a classified ad that says;
Most often I’ll use a Realtor, so there’s my 3/2 with Garage
6%. If I don’t use a Realtor, there are times when $129,942; $0 down
I’ll throw in some closing costs for my buyer, or XXX-XXXX
whatever. So I just figure 6% is the cost of
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and if you don’t think the phone rings off the Then, once you’re comfortable with how
hook then you haven’t been in this business very the business works, turn Trash Into Cash, and
long ! create for yourself a Real Estate Fortune!
There’s a long list of things that can go _______________________________________
wrong when Retailing a house for top dollar to
an A-Credit buyer. If you increase your Real For more information on how to get started on
Estate knowledge to be able to include other your way to creating a Multi-Million dollar Real
ways to sell your Rehabs, you’ll expand the size Estate Business including Wholesaling for Fast
of your business, and the size of your paychecks! Cash Profits, and Turning Trash Into Cash by
Rehabbing and Selling, check out
Remember that rehabbing is the next step in WWW.HomeFinancingOptions.Com, or call
your real estate career. Get into the business first, Home Financing Options at 1-561-536-0550,
before you start rehabbing. I highly recommend and ask for the “Trash Into CASH” Power
finding great deals and passing them onto other Weekend.”
investors or rehab buyers- wholesaling.
It’s a step by step guide to creating fast profits
thorough quick turning Real Estate.
You’ll get in the business, you’ll be able to
find the properties, you’ll start making fast cash, Or, Call 1-561-536-0550 now!
and you’ll get to maximize your real estate
experience because you’ll be maximizing your
exposure to sellers, to the market and to the Real
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