[00:00:00] Intro: If you're a real estate agent earning 200, 000 a year and you want to grow your passive income, this show is for you. Learn secrets other agents use and hear from experts in our field who will guide you on your journey to investing in assets like apartment communities so you can take your commissions and turn them into cashflow.
[00:00:20] Intro: Here's your host, Randall. Let's dive in. All
[00:00:22] Randal McLeaird: right. All right. Welcome back. It's great to have you on today. I'm doing a quick episode on the calculator. later in the actual Excel format that I use in order to review all the single family properties that are coming in from wholesalers or things that we find and source ourselves.
[00:00:37] Randal McLeaird: And just wanted to share how we use it so that if you're looking at investing in the RAM capital fund you will understand how we're actually doing the due diligence on the front end of those deals. So if you're not watching on YouTube, I highly suggest you go over to YouTube and you can take a look at this video and I'll actually walk through exactly what we're looking at on these deals as they come through.
[00:00:57] Randal McLeaird: So I'm going to use a fake example. Let's just go ahead and jump in. Let me use this example. And I may have gone through this before in the past, but I really wanted to use it again, just so that you could see the types of deals that we're looking at. I've got an example already loaded in here.
[00:01:09] Randal McLeaird: It's 123 Main Street, it's three bed, two baths. So I'm going to change some of this to one of the properties that we just bought. It's a two bed, one bath and actually it's 1. 5. So it's a one and a half. And it doesn't have a garage or carport. None. It is 1250 square feet. ARVs actually. I'm entering in all of this stuff. Again, if you're watching and following along on YouTube, you'll actually see what I'm entering. But I have set up this sheet so that every kind of deal that is possible.
[00:01:38] Randal McLeaird: Once I look at one deal I just I use this sheet so that I can always go back and actually review the properties that we've looked at in case they come back online or in case somebody else buys them. We can see what we offered compared to what they did. What our ARV is compared to what their ARV was.
[00:01:54] Randal McLeaird: So it's a great tool. I'm going to make this free as well. So if you want to download this, you can go to Commission2Cashflow.Com/FREE. The show, the links can be in the show notes. I'm gonna start putting everything that we talk about in the show on a free resource page that you can just go to and you can download.
[00:02:10] Randal McLeaird: Any of those resources that you always have them if you're looking at it We'll make a list of all the books that have been recommended everything's going to be in one spot on one page So we're working on that in the back end But now for now, again, if you're just listening on a podcast I'm entering all the information about this property on a single page on the very first page and then what I'm going to do is I cut this line out and, or copy it and paste it into another tab on the sheet and then it populates across a number of sheets.
[00:02:35] Randal McLeaird: So it's like a multifamily underwriting type deal. But I am using this for the single family. Again, this is the deal that we just bought the ARV is 215,000 the rehab. So there's a couple of ways to look at this thing. I could pay cash for this thing, which we already paid cash for it.
[00:02:51] Randal McLeaird: And we could end up spending. 40 to 50, 000 on the property to sell at retail for 215, 000. We are probably going to owner finance this so we could keep the single pane windows. We could keep the layout the way it is. We don't actually have to turn this into a two, two. We were going to convert one of the bathrooms.
[00:03:14] Randal McLeaird: We're going to move the laundry room. We're going to do a number of things, but instead we're just going to close off a garage. We're going to finish it out. And it was only really half garage. They'd already done a partial conversion in the past. And so what we're doing is just keeping most of the layout.
[00:03:28] Randal McLeaird: We're going to save a bunch of money on the rehab, lean up the yard, and we're probably going to spend about 25, 000 on repairs. Actually say 30, because we just redid a few things. So this sheet is also set up if you are going to wholesale. So if you want to look at a quick wholesale number, and I know that the ARV is 215, rehab costs are 30, and I want a 70% deal, then the max I would pay for this thing is a hundred and twenty thousand dollars So when we bought it, it was closer to a 50 because we were thinking we were going to do a retail and so I want a 70 percent deal and this is how I priced it. So we bought this thing for a hundred thousand dollars.
[00:04:06] Randal McLeaird: So really when you're looking at this thing we are getting it at a 60 percent deal. I'm sorry, 61. So I just play with the numbers until I get to about what we offered. Taxes on this, I think we're 3, 500, insurance is closer to 1, 200, future rents. So again this thing is going to calculate all kinds of different this is a wholesaler.
[00:04:31] Randal McLeaird: Single family future rents this will calculate the return on investment just from this page very quickly if you put in the future rents for the property we ran the numbers, I'd have to do them again, but for this deal, what I do is I'll take The whole tab, I'll copy it, I'll put it into this entry line up here, and it rewrites everything the way I just had it, right?
[00:04:55] Randal McLeaird: And then what it will do is populate the offer table, if you're going to wholesale, how big of a fee you want, what you should be buying it for an 80, 75, 70 percent deal. It'll tell you if you do a cash rental, what this deal will look like, so it's a 10 percent ROI if you were to buy it and pay cash.
[00:05:12] Randal McLeaird: And that's, 3 percent property management fee, vacancy of 5%, insurance, that all populates, taxes, so then my total annual would be 6, 000 on a, or sorry those expenses total cash flow, net cash flow would be 12, 000. on a 125, 000 all in cost, something like that. So that's how it calculates this number very quickly.
[00:05:36] Randal McLeaird: And then the ARV model based on total comps. You can come in here and quickly just type in low number for the dollar per square foot. So if it was a dollar dollar 80 let's go with a dollar 70, 170. So on a low end, the sink selling for 212. And then you can just see if we get up to 183 a foot, then it's going to be around 230, 000.
[00:05:58] Randal McLeaird: So it's a very quick calculator if you just type in one number, it'll give you a range of prices that this thing can sell for. So again, the whole point of this is to explain if you're looking at the RAM capital fund and you're wondering how we're looking at deals, this is basic, very first thing we always do.
[00:06:15] Randal McLeaird: This takes about five or 10 minutes for us to analyze a deal very quickly and understand where we are on the price point, what people are asking. So again, if they, if somebody wanted a super high number let's say that they're at 80, we'd be paying 142, 000 for this deal. It's a very tight deal already.
[00:06:34] Randal McLeaird: And so there's not much spread in there. We don't like to be in deals like that. Again, it tells us very quickly what somebody is selling it to us for. I think when they initially put this thing out, it was probably at $130,000. And so that would've been a 60 sorry, 80, 75%. Yeah, 75% deal.
[00:06:54] Randal McLeaird: But they were at a $40,000 rehab. So yeah, it was closer to 80 what they were selling this thing for. And again, those numbers just don't work for us. Let's go back to what we had. There we go. Because What I want on this screen, I want, this is the main entry tab. Again, if you're just listening on the main entry tab that I'm entering all the information, it's going to be a list of addresses so that I can always go in and I can just control F and find find the address that we're looking for.
[00:07:23] Randal McLeaird: And Then see what it is that I offered. So every time after I go into and put it in the entry and I rework whatever I'm gonna do over here, I'm gonna show you all these other tabs. In a second, I will just copy and paste this last entry back onto the main screen so that way we can keep track of all of the final offers and things that we submitted.
[00:07:43] Randal McLeaird: Okay. So again, once I have it on the main entry tab. And I've got all of the information basically the way that I want it. So we're buying a 60 percent deal, paying 30, 000 in rehab so we're going to be all in this deal at 130, 000, give or take, right? Then I need to go back, if I really want to get in, if the deal is close, we made it.
[00:08:03] Randal McLeaird: Close with the seller and, or the wholesaler or whatever, then I'll come in and the next tab is the rehab work. I want to look in and see quickly through pictures how much the actual rehab is going to cost. And this thing is fairly extensive and you can obviously update all of the pricing for yourself and how it works.
[00:08:21] Randal McLeaird: Most of these, if you click on it and you look up here, these are formulas that should be formulas. So we may update this because they should all be, this is a formula. So if it's not a formula, then it's a flat. Replace the roof. You need to get a bid on that. And then you're just going to put a price in there.
[00:08:37] Randal McLeaird: This is the first column is for labor and materials. And then if you're just looking at materials and labor, you can break those out as well. Or you can just simply come over here and hide these columns if you don't want to see those because there's too much in there. So you'll hide boom. All right.
[00:08:52] Randal McLeaird: And then what you can do is once you're done with this, you have a scope of work. If you want to send this to your contractor, You can, again, hide these columns and everything that you put an X next to, you filter by the X, just with an X. And these are the only things you want somebody to bid on, right?
[00:09:13] Randal McLeaird: This is a very quick way for you to come in and create a scope of work for contractors. And then to make sure that you're getting everything in the bid. And the same bid from all the contractors, because that's always a pain to get one guy bidding on two things and then another guy bidding on everything and yeah, so anyway, we go in, we do this assuming that our rehab number comes out to about the same price.
[00:09:35] Randal McLeaird: This is information from another deal, so this isn't pertinent to this deal, but I would go through and I would say, We're going to have to do foundation repair. Okay, get a bid. Roof, how much is the roof going to cost? How many dumpsters are we going to need? All the way down to light fixtures, drywall sheets, everything's in here, toilets, vanity lights, all that stuff is in here.
[00:09:54] Randal McLeaird: And we have pretty standard pricing across the board. And if you're doing a bunch of rehabs, I recommend you do the same. So again, we put this in. Let's assume that our number's right. Cool. 30, 000. We're there. Now what are we going to do with this thing? Are we going to a conventional loan rental?
[00:10:09] Randal McLeaird: No, we're not on this deal, but if you come to this tab you can start going through and see all the different types of fees on the purchase and closing costs. All right. So if you're buying this from the wholesale, you may be paying a bunch of fees. Your price is going to be inclusive of their wholesale fee, but it's not going to be inclusive of taxes, insurance survey, title insurance all those things.
[00:10:30] Randal McLeaird: So make sure you put this information in here because this 22 carries over to 2, 600 carries over to your actual closing costs. So again, this is a traditional purchase with conventional loan, not what we're doing, but I'm just showing you this for for the purposes of this video. So your purchase price.
[00:10:48] Randal McLeaird: LTV is going to be something that you're going to enter. How much are you actually getting on the loan to value? And then it will calculate your loan amount, repairs, remaining loan balance. So this gives you your cash due at closing. So that's one tab.
[00:11:02] Randal McLeaird: This is if you are looking to sell this thing as a wholesale, so it's just a quick way to look at a a deal, I don't need to clean the sheet up, but if you're going to wholesale this thing, then you could take this, go all the way down, copy and paste it into a marketing flyer that you're putting out, and it will basically tell your investor who you're selling this deal to what they're selling it for.
[00:11:25] Randal McLeaird: This purchase price is for them. If I came over here and I put in, I wanted a, 15, 000 fee, then the offer price is going to be here. That's what we would buy it for. Sale price is still here, the 100, 000. So if you go over to the marketing sheet, again, we're selling for 100, 000 to our investor, right?
[00:11:45] Randal McLeaird: But we're buying it from the seller at 85, 000. So that's just what that means. Again, gives you a way to market the deal. So let's keep going down here. Let's say if we buy it cash. These are, this is what it looks like. We're buying it for 100, 000, our closing cost, because we paid title insurance and a few other things.
[00:12:03] Randal McLeaird: We're in it for 103, 000. Repairs, 30, 000. We're all in cost 133, 000. So that's basically what we did. This is if we're going to refinance. What do we think we can get our, Loan to value once we refi. We know the total value. So we're going to get 160, 000 loan. We'd actually be pulling out 33, 000. Let's see.
[00:12:23] Randal McLeaird: Initial investment, refi closing costs. Actually. Okay. So because the closing costs are we're saying there's going to be 6 percent closing costs. That's not always the case, but that's a high number. And then it calculates what the deal would look like going forward based on those rents that you put in earlier, 1600. See?
[00:12:39] Randal McLeaird: So again that's one type of deal. Cash flips, let's see. All right. So then, yeah, if we were to flip this thing, our net profit would be 61, 000. Again, I haven't really had to do anything in here. How long is it going to take? So these blue lines, like how long is it going to take to flip? That will calculate your taxes and insurance and your holding costs.
[00:12:59] Randal McLeaird: So months to flip and sell boom, tells you those things. Hard money flip, how much, so our net profit on her money flip is 36 compared to a cash flip. Significant difference just based on the the cash required and the total costs, right? So 8, 000 this is 10, so let's say three months.
[00:13:19] Randal McLeaird: So 53, 000, right? So it's it was the holding time. It'll calculate the hard money, rehab, refi, rental. So that's a BRRRR strategy if you wanted to borrow money. Conventional assignment. Again, this is what it looks like, how much money you would make if you were going to assign this deal. And then if you're talking to sellers directly, we have a seller proceeds sheet that you can actually copy and rent. Let's do this.
[00:13:45] Randal McLeaird: Okay. So it'll give you the seller proceeds. Again, you can take this and use it as marketing collateral if you're going direct to seller and talking to them. It'll compare the, what happens if you renovate and sell it to a realtor compared to no fixing and selling through a realtor still gonna have commissions or selling your house to and then Put your name in here.
[00:14:02] Randal McLeaird: Oh, SA House Purchases are. Again it'll show them the breakdown. If you fill this information out you will, yeah, you have to fill out this sheet. It's not actually tied to the other thing. So we can clean that up or you can clean it up when you get it as well. Private lender rental and then the marketing sheet.
[00:14:19] Randal McLeaird: So again there's a a ton of information that we go through to quickly analyze the deal. And then This is just one tool that we have. So if you're wondering how we are analyzing the deals, when we are buying them ourselves, this is our go to sheet. It tells us everything that we need to know and it gives us different deal scenarios.
[00:14:38] Randal McLeaird: If we were to flip it, keep it any of the options that we have. So hopefully this is helpful. Again, if you want access to the sheet and any of the other documents that we're using, then definitely head over to Commission2Cashflow.Com/FREE, I believe is the link. If it's so good out to the links below in the show notes and we'll have that copied in there as well.
[00:15:00] Randal McLeaird: If you have any questions, feel free to reach out, podcast@agentsbuildingcashflow.com and we will chat and let you know. If you're interested in investing in the RAM Capital Fund, go over to RidgelineIG.com and go to the offerings tab. And there you'll find information about the RAM Capital Fund.
[00:15:17] Randal McLeaird: You can ping us there, talk to me directly through the chatbot on that page as well, and I'm happy to answer any questions about that. Happy investing. Take care. Talk to you soon. Did you know that 80 percent of the agents we speak with got into real estate in order to gain passive income so they could obtain financial freedom and become work optional.
[00:15:35] Randal McLeaird: If you want to stay up to date, the best way is to make sure you're subscribed. So if you haven't done that, go ahead and do it now. We'll catch you on the next episode.
