Welcome to Day One of ouf Memphis Tennessee Real Estate Investing Case Study. My name is Lorena Gerlach and I’m a real estate investor working my own business and a coach for Bob Leonetti and Jayme Kahla through Real Estate Profit Coach. I travel the country helping Bob and Jayme with their real estate investing seminars. I also work with our students on-site and assist them in building their real estate business.
I recently completed a four day 1:1 with one of our students, Kay Kirkpatrick. Kay lives in the Memphis area in Tennessee. Kay wants to provide a living for herself and give herself some flexibility for life issues, such as caring for an elderly parent. She also wanted a portable business that could be picked up and moved to another major metropolitan area, if that’s where life takes her.
Kay has participated in many real estate investing training events and bought one property. She had the “got-to-get-a-dealitis” and bought the property as a flip with short term financing in place. The property turned out to be in a rental or lease-option neighborhood. More on this challenge later.
So how do we get started? The first nut to tackle was documenting goals and refining her business plan. RealEstateProfitCoach.com has a great Profit Mapping 90 Day Action Plan that I used to get us started.
Profit Mapping is an important exercise that I have all my students either complete or review, depending on where they are in their investment business. Kay had completed this task in advance, so we reviewed her financial goals for the next six months. To meet her financial goals, we determined that Kay needed a total of 24 deals. This may seem like an overwhelming number, so let’s break that down:
- 240 offers total Tennessee
- 24 deals total
- 4 wholesale deals a month
- 40 offers per month
- 10 offers per week
- 50 sellers per week
Now Kay has a weekly activity plan to keep her motivated and moving forward. What will she focus on? We began reviewing and finalizing Kay’s business plan. First, defined buying criteria:
- Want 3/2 SFR. Buying to hold.
- Want ARV $80 – 120k
- Light repairs up to $15k
- Need to purchase at 65% of ARV less repairs
- Target buying areas:
- Southeast Memphis
- Raleigh
- Bartlett
With the what and the where defined, it was time to focus on the who. Kay determined the following would be her target segments:
- REOs
- Wholesaling w/ double close
- Assignment of contract
- Work offering Owner Financing for exit strategy on properties Kay controlled
- Work with defaulted notes
- Work with pre-foreclosures
- Sub2 reinstatement
- Short Sales
- Loan Mods – referral to loan officer
With the what, where and who, we turned to the how. Just how would Kay accomplish and reach her target segment?
Through marketing and lead generation. Kay has marketing materials from several seminars attended that have generated good results for her previously. She would target pre-foreclosures from The Memphis Daily News and MLS Expireds from real estate agents on her team.
We went on a property tour to one of Kay’s target neighborhoods. During the trip, we recorded each For Sale/For Rent/We Buy Houses signs we came across. Several times we stopped and called on the signs to determine either price or rent requested to help refine our neighborhood profile. The end result was this is a great target neighborhood!
We went back to Kay’s home office to begin our marketing efforts on her target segments. Through Realtor.com we found REO real estate agents and contacted them with our REO buying criteria. You can search for my article on finding real estate agents through Realtor.com at the realestateprofitcoach.com.
Through REI clubs and local Meetups we found hard money lenders. We sent an email blast to them with our buying criteria, and did the same for REI and Meetup members. Online social networks are great to quickly get your message out to a large number of people with similar interests.
We ended our day by reviewing our accomplishments and setting a schedule for the next day. I left Kay with several homework assignments to complete that night. A great start to our four days, three more to go!
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