The Art of Control
This week I will be travelling to Orlando, FL to speak at a convention of investors. The subject of my presentation is "The Art of Control", and it is based on the following concept. When I was a lawyer practicing in a big firm I structured many deals ranging from $5 Million to $250 Million. In not one of those transactions was the creditworthiness of the principals the issue. Nobody cared about anybody's FICO score when putting those deals together. The primary concerns were things like the liquidity of the buying entity, the performance of the asset, etc. What we spent most of our time focused on was how the deal was structured and who controlled the deal. People brought different things to the table. A money partner brought capital, a developer or contractor brought sweat equity, sometimes somebody else contributed the land if it was a development deal. But an important consideration was to make sure that the person who had structured the deal maintained enough control over the process to ensure that the original objectives were achieved.
In the residential context however, we try to do it all ourselves instead of creating a team of people who will bring different things to the table. Part of the reason for this is because we don't use the deal structuring methodology employed in the commercial context. Viewing it from this perspective, it struck me as strangely anomalous that at the level of a single family house, investors rely so heavily on their personal credit to structure transactions. This observation seemed even more odd in an environment where (1) lenders have dramatically tightened their underwriting standards and (2) so many people have suffered damage to their credit as a result of what has transpired over the last two years.
Going forward I plan to go backwards. I plan to go back to the principles of deal structuring that I learned as a young lawyer. Highly liquid entities with control vested in the appropriate hands, putting deals together with little to no leverage and therefore less risk.
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LOL - Laughs OnLine
"Repeat after me - I will never complain about my job again!"
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That's the Ticket
by Dennis Duling
 "Do you know why I pulled you
over?" Eight little words that cause our skin to crawl or our blood to boil,
depending on whether you blame the cop or yourself for your predicament. Having
been in this particular situation several dozen times in my life, I can count
only about three where I've emerged ticketless. I like to tell people that I
have a PhD in Traffic School.
One such roadside encounter went something like
this:
Cop: "Do you know why I pulled you over?"
Me: "Yes, because I'm an idiot."
Cop: "Well, I don't know about that."
Me: "Yes, I'm an idiot because my father-in-law told me that you guys liked
to lie in wait along this road and I still came through here going too fast."
The conversation went on a
bit, with me being so hard on myself that the cop was actually defending me
before we were done. I got off with no citation that time. However, that was
the rare exception. Of course, as I've gotten older, I think I've finally
figured out another way to not get a ticket - don't do something to get pulled
over in the first place.
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Share If You Care
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Sincerely,
Kwame J. Granderson
Equinaire
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Need a Loan Modification?
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Old Payment $2,459
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Did You Know
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Did you Know?
Dueling is legal in Paraguay as long as both parties are registered blood donors.
Did you also know that when your loan is sold to another servicing lender, it is your responsibility to ensure that proof of insurance is conveyed to the new lender?
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Deal Summary
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2005 Hemminway Place
San Jacinto, CA 92583
Acquisition Costs
Purchase Price $123,000.00
Loan Amount N/A - All Cash
Closing Cost N/A - Trustee Sale
Total Acquisition Costs $123,000.00
Renovation Costs $7,000.00
Miscellaneous Costs $498.17
Total Capital Outlay $130,498.17
Sales Price $176,500.00
Sales Costs $16,932.52
Sales Proceeds $159,567.48
NET PROFIT $29,069.310
Purchase Date 7/30/09
Sales Date (Close of escrow)
10/01/09
63 days
For information on deals like this call 626 653-2728
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Upcoming Webinars
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Be on the lookout for upcoming webinars in the "Flipping the Smart Way" Series:
How to Identify a Profitable Flip Project
How to Write a Winning Offer
What to Look for in the Home Inspection
How to Market for Resale
Analyzing Your Profits
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