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I HAVE LEARNED A WEALTH OF INFORMATION

In the two months that I have been involved with Prosper Inc, I have learned a wealth of information, and am well on my way to building a portfolio. I have looked at dozens of properties and have made 8 offers on properties ranging from 2 bed 1 bath houses to 4 bed 2 bath houses. Some have been rejected out of hand, and others have come close to being accepted. If nothing else, I have learned that in order to get a good deal, you have to make a lot of offers, the training materials say to expect one deal out of 12 or 13 offers.

My latest offer is a 3 bed 2 bath home that has a large office/den that only needs a closet to become a 4th bed. The owner was asking $250,000 and told me he would be willing to replace the washer /dryer and the stove if someone would purchase his house. The appliances are in good shape but are “used”. The only other problem with the house is that it has limited street access on a busy street.

I offered $230,000 with the appliance replacement, figuring I could put in a closet for little if anything, and contacted an asphalt company and found it would only cost about $1,000 to turn the driveway into a “u” shaped driveway, vastly improving access to the property. I have a 2 bed one bath house within 1.5 miles of this home and it was recently appraised at $230,000, so I figure my offer was pretty good.

While we were in our coaching sesion tonight he counter offered $232,000 with a $2,000 allowance for new appliances. I am going to get back to him and offer $230,000 and drop the appliance replacement. I am pretty sure that this deal is going to get closed on pretty quickly, as we are not far apart. Similar homes in the area, (4 bed 2 bath) approx 1300 square feet, have recently sold in the $260,000 to $270,000 range. Even if I put $5,000 into the house I stand to look at about a $30,000 proffit. That is not too bad of return for 10 to 15 hours a week for two months

Well, gotta go make that counter-counter offer, keep your fingers crossed for me, and next week I’ll let you know what happened.

Larry T.
Tukwila, WA

HAVING SOMEONE TO TALK TO AT Prosper Inc IS MUCH MORE EXCITING

My dad and I purchased a condo (2BD 1BA) near my house for about $80,000 – $90,000 below market value. It was very disgusting and hard to imagine anyone could live in it. My dad came to me and asked if I would be interested in purchasing it with him and I told him I was extremely interested. The owner was asking $300,000 but my dad was going to start of by offering him $285,000. I talked with my dad and told him he should offer even less because it is better to start lower then work up high than to start off high and work it up even higher. I thought that considering the shape it was in $275,000 was more reasonable. So, my dad met with the seller and offered him $270,000 and the seller countered with $280,000 then my dad countered with $275,000 and he took the offer. I was and still am very excited about the deal.

The seller was told by the agent that if he wanted more money for it she could still put it on the MLS and he could get up to $300,000 but he refused because he didn’t want to have a bunch of people looking at his home. Escrow closed on the 26th of January, one day later and the bank would of had it. It has come along way in only a month and it has been such a learning experience already. All of my friends thought and probably still do think I am nuts for buying something as nasty as I have, but it has already come a long way. It is financed in my name as owner occupied in order to get the better interest rate but my dad owns 75% and I own 25%. We are going to get it fixed up then rent it for at least a year because sometime within the year the HOA is suppose to repaint the condos, which will hopefully only increase the value even more. The income from the rent will just about cover the mortgage and the HOA Fees, so it will cost my dad and I very little each month when it is rented.

I just wanted to thank you for all that you have taught me. I know that I haven’t taken advantage of the program as much as I would have liked to with my fiancé’s father getting cancer and then passing away but being able to talk to someone who does it for a living like you makes the program all worth while. As much as I like to read real estate investing booking, being able to talk to someone who does it for a living and to actually go through the experience is so much more exciting. I hope to have an offer for you to approve in another month when I purchase a property in Texas.

Amber H.
Fullerton, CA

THESE TWO DEALS WILL NET $175K Prosper Inc Success Stories and Prosper Inc Coaching

The 2 point lots on the golf course are listed for $30K each; I offered $20K each (gross) and the offer was accepted!! I signed the purchase/sale agreement yesterday. How about that!? I got comparatives from my agent on these lots and the last lot sold in this sub division was sold for $60K and they are now appraised at $75K!

I’m not done yet! The other property located in Fortune Point that’s listed for $45K, I offered $35K (net). (These lots are now going for anywhere between $75K and $100K!) I also signed a purchase /sale agreement for this lot.

Do the math….these two deals will net me a gain of $175K! I have my eye on a few other deals, I will discuss them with you in our next meeting.

Prudence M.
Ft. Lauderdale, FL

MY COACH HELPED ME UNDERSTAND PROPERTIES FROM AN INVESTMENT POINT OF VIEW

My Prosper Inc coach has assisted in my learning experience in Real Estate. He helped me build my team (real estate agents, lender, etc), encouraged me to attend club meetings, and understand properties from the investment point of view. I feel that our weekly discussions have been productive.

I chose an agent who helped me analyze investment properties and develop offers. The lender has been positive and creative through re-financing and getting my most recent loan approved. I’m in the process of purchasing waterfront property that is a great value and investment. We are scheduled to close on March 21st and will then begin the process of selling our current beach house. I truly believe that both of these transactions will be profitable for me.

I appreciate the advice and guidance. I will continue to invest, as I have another offer submitted on a foreclosure property that is being reviewed by the bank. If this transaction is approved and accepted, the property will be a total rehab that I will use as a rental.

Mike & Margaret J.
Kent, WA

I BROUGHT NO MONEY TO CLOSING AND LEFT WITH $4000

Thanks to Prosper Inc I looked at fifteen houses, made three offers and had one offer accepted at a wholesale price. Most of the properties that I found were through my real estate agent, but I found the last one online using Craig’s list. The three-family house was listed on Craig’s list by a real estate agent. The listing was very detailed and had several pictures on it. Based on the information on the listing, I decided to give the real estate agent a call. He quickly returned my call and I was able to view the property within a few days. After seeing the property and analyzing its Fair Market Value (FMV) using the tools I learned from my coaching sessions, I was ready to make an offer. I identified my base price ($125K) and my max. offer price ($140K) so I met up with the seller’s real estate agent and made an initial offer of $125K plus the seller would provide $2,500 as a decorating allowance and $1,000 to pay for a one year warrantee on all three units (asking price $155K and projected FMV 175K). I received a counter-offer the next day for $141K. I made a second offer for $137K, but in addition to what we already agreed to I asked for an additional $2,000 from the seller to pay for closing cost. The seller made a second counter for $137,500 and agreed to all my other terms. I accepted the counter and after all of the negotiating I ended up netting a $132K contract for the house which was 8K below my max offer. My next step was to lock down financing. I called at least 10 banks and mortgage companies to see if I qualified for 100% financing. I could not find anyone in the industry that was offering 100% financing so I went with the next best things which was a FHA loan with 3% down. Since my goal was not to bring any money with me to closing, I negotiated with the seller to add the 3% to the sales price and agree to an additional 3% seller concession. I had an inspection done and overall the property did very well, but there were a few things that did not pass inspection so the seller agreed to fix them before closing. I found a home insurance policy and the appraisal came back positive so we were ready for closing. I did not bring any money with me to closing and I ended up bringing home a check for a little over 4K. I bought this house with two out of the three apartments rented and I plan to live in the third apartment. This is my third property and I have bought the last two within the last 6 months. I am planning to buy my next property over the summer.

Thank you again for all your support.

Adrianne M.
Cincinnati, OH

I COULDN’T HAVE DONE ANY OF THIS WITHOUT MY Prosper Inc COACH

After looking at lots of houses over a couple of months I finally found the property that I knew was it. It was a nice home from the 50’s that had been on the market for almost a year and the seller was asking $127,000 but it needed lots of upgrades. I was also told that the sellers were highly motivated which was what my coach had told me to look for when going for the deal. The first offer I made was for $100,000. My Realtor and everyone in her office kept saying that the offer was too low and that the seller wouldn’t even consider it and that I needed to make it higher or I was going to lose the deal. I said NO and that this was my offer and that they needed to present it. Under much protest they presented it and the seller came back with a counter offer of $107,000 ($20,000 less than the asking). I countered with a final offer of $104,000 and they accepted. My real estate agent was amazed. They just couldn’t believe that my offer had been accepted that low. I completed the deal in September. I’ve spent approximately $10-12,000 to replaced the shingles on the roof, replaced the furnace, replaced the windows, painted all the rooms, pulled carpets to expose the beautiful hardwood floors, re-carpeted the basement, and enclosed the laundry room. Right now I’m in the midst of closing a lease-to-buy deal on the house with a couple who have agreed to $135,000 for the home. I am also working on developing 3 lots I have owned for quite some time in Challis, ID. I couldn’t have done any of this without the knowledge that I got from Prosper Inc and my coach. Thank you so much.

Janelle P.
American Falls, ID

I CLOSED ON MY THIRD PROPERTY AND SHOULD PROFIT $35K

Thank you so much Prosper Inc for your support and encouragement these past two months!! Jason and I closed today on our first two rental properties!! I have to share our success story with you…

Let me start at the beginning… Jason and I got married in December 2004. I was a 60-plus-hour-a-week workaholic — market research & business development strategy for a small marketing agency. Jason was also working 2 jobs nursing — on the NIGHT shift. We were married for less than a year and hardly spent more than one day a week together (or night) during which we were so exhausted we barely felt like being sociable with each other — let alone enjoying being newlyweds!!

Last summer (2005), Jason and I decided to move away from our home, family, friends, church, jobs, LIFE in Mississippi to pursue travel nursing in California. In September, Jason began travel nursing, and I became a stay-home wife — in California. (I went from 200 miles-per-hour to about 5!! Can we say depression?!!)

Our original goal was to travel for 2-3 years to earn enough to pay off our home and all our debts so that we could afford to live on one income when we started having children, and I could stay home with the kids. And Jason could QUIT WORKING NIGHTS!!!! Well, it didn’t take 2-3 weeks to start missing home and by 2-3 months I came home twice for visits. We were ready to move home sooner, but not willing to sacrifice our financial goals to return to the same 60-hour-work-week lifestyle that we had before.

It was at this time that one of Jason’s co-workers — a fellow travel nurse — began talking to him about real estate investing. In November, we ordered Robert Kiyosaki’s “Rich Dad Poor Dad” and began reading about how we could change our life. We began to realize that we don’t want to be employees for the rest of our lives. Praise GOD for PASSIVE INCOME!!! We had a new lease on life. We wanted to become real estate investors!!!

Through the Rich Dad influence, Jason and I decided that we wanted to be long-term investors rather than short-term flippers, so we began looking for rental property…Today Jason and I purchased two units for $135k, which appraised for $166k and will rent for $800 each, providing us with $200/month cash flow—after all expenses, vacancy allowances, maintenance and a cash reserve. What’s even better — as soon as we repair the ugly side, we will complete our refinance at 90% loan-to-value and secure our final mortgage loan for $149k and still have $200/month cash flow, plus get $14k back to cover repair cost and the down payment on our NEXT property…

Gale, we couldn’t have done this without you. Your support, encouragement and guidance has given us the courage and knowledge to succeed in this first endeavor. The Prosper resources — property analysis forms and rental analysis formulas — were invaluable to us. You and Prosper equipped us to make this possible, and we are forever grateful!! I look forward to your guidance through the next phases of repair and property management. We’ve got new ground to cover!!

Our new goal is to purchase one rental property a month. I am devoting my time now to get this new company off the ground. I LOVE being my own boss now and pray that God blesses this new venture!! Last week, I went by my old office and sat down for an hour with the owner catching up on our adventures. It was with great joy and conviction that I told her I hope I never have to be an employee again!!! I told her that I want us to partner in new ventures together. To which, she eagerly agreed!

So, I have traded in my 60-hour-a-week job for 30 hours a week of real estate. Jason and I were able to move home, work less, spend more time with each other and our family and friends, invest more time in our church and community, and share our new financial education with those less fortunate and less educated than ourselves. I’d say we’re off to a great start!

Jason and I now are concentrating the next 2-3 years on getting our passive income up to at least $3,000/month so we can live comfortably on one salary when we start having kids. We’ve also added a new goal to be fully passive in 5 years — as in, Jason can stop nursing if he so chooses.

I can’t wait to share our next success with you. I know you’ll play another part in it!

SUCCESS UPDATE

Yesterday, I closed on my third property. I just wanted to complete that, so I could include that update in my testimony. Here’s the update.

Two weeks ago, I was calling a realtor on a property. After leaving five messages, I finally got her on the phone Saturday morning, April 29. The property I called about didn’t pan out, but she became one of my greatest networking opportunities. She invited me to attend our local investors’ club. And, even better, she told me to call someone about another property that wasn’t on the market yet. For a $1,000 birddogging fee (a fee paid to someone who gives you a lead on a property), she gave me the seller’s number and let me use her name.

I contacted the seller immediately. The property belonged to a 66-year-old widow who was liquidating her rental property. The guy I contacted was wholesaling — selling his option to purchase the property. The property was offered for $57,500 — $50k for the property and $7,500 for a Release of Option fee. The realtor who referred me to the property recently sold 4 comparable properties in the area for prices ranging from $100k-$120k.

I was blown away!!!! I signed the contract immediately!!! The 1610 sq. ft., 3/2 house was built in 1950. It has a solid structure, good roof, vinyl siding, nice hardwood floors, a good kitchen. The only rehab needed is new vinyl floors in the kitchen, paint and some updating in the bathrooms. There is a dilapidated garage detached from the house which we will probably tear down. Doing much of the repairs ourselves, my husband and I can put less than $70k in this house, which we intend to sell in 6 months for approx. $105k. This one property will generate more income than I made in a year at my previous job!!

The property is currently rented at $700/month — $201 of which is supplemented by HUD. We plan to relocate the tenants in 2-3 months. But, in the meantime, their rent will pay the expenses and generate a small cashflow.

The only catch to this property was…we had to close by May 10. I had 11 days to get this property financed!! I tried my personal bank, which 100% financed my duplex I just closed on April 24. They were willing to finance us again, but they couldn’t promise that they’d close in 10 days. I shared my dilemma with the guy who’s selling me his option on the contract, and he referred me to his bank. This bank is fairly new, small, privately owned and got me an answer in 1 day. They financed 80% of the costs at 7.75% amortized over 15 years with a 5 year balloon. The payment will be $438/mo. This allows me to hold the property for 6 months and avoid any seasoning issues when I sell it. Plus, the $700/mo rent will easily cover my expenses for a few months!

So, yesterday I closed on my third property — third property in less than a month. It is a rental temporarily, then we will rehab and retail it to earn approx. $35k in the fall. I plan to use a 1031 exchange to put that money into another rehab project. My new goal is to rehab two properties and roll the equity into a rental property. This method will allow me to have very low mortgages on my rental properties and much higher cashflow. My husband and I have decided to leave ourselves a nice cushion on our rental properties while we’re starting out in the business. It will be much less stressful to know that another disaster like Hurricane Katrina couldn’t put us into foreclosure.

Lori & Jason S.
Brandon, MS

MY 4-UNIT BUILDING BRINGS IN $900 MONTHLY PASSIVE INCOME – Prosper Inc Success

I just closed escrow on my first property in New York. It is a 4-unit building that is fully rented and brings in $900 a month in passive income. The asking price was $129K and I got it under contract for $124K with 10% down plus closing costs. I must admit, obtaining conventional financing took a bit longer than expected, as I did not own any real estate and the lenders considered me high risk. I managed to find a lender to take on the loan and, after an exhausting process, I got the OK to fund the loan and by the following week I closed on the property.

Right now, I am using my first building as leverage into a multi-property deal where the seller has agreed to do seller financing and hold paper. I am very excited about doing this next deal. If all goes according to plan, it will bring in a fantastic cash flow and will be a great addition to my real estate portfolio. I will then be a few steps away from quitting my full time job.

I want to thank you for all your help and guidance over the last few months. You kept me motivated and gave great advice on how to handle certain situations.

Richard M.
Hermosa Beach, CA

p.s. Having a business partner of this deal, I managed to do it $0 out of my own pocket.

I GOT A $26K PROFIT FOR MY EFFORTS – Prosper Inc Success and Prosper Inc Coaching

This home is a 2/1 block in the HOTTEST part of town and funded just today! A friend of mine brought this deal to me. The sellers were his aunt and uncle. He has recently been confined to a wheel chair and she takes care of him full time. He has cancer, among other problems. Their bills were eating them alive, so they asked the tenant to move out–it was their daughter-in-law. Her husband, their son, died a number of years ago, so they let her stay in the home, but she completely trashed the home and quite obviously her nose quit working YEARS ago.

They called me to see what my estimate would be to repair the home so they could list it. My estimate was $40K, which they really didn’t have. I told them I had another idea—How about they sell it to me. I put it under contract for $45K. The ARV is about $150K. I immediately sold it for $66,250. About 5 days later I get a call from the title company. My buyer has 11 federal tax liens and did I know he was also selling it? Oh, I was mad! After much consternation, I finally get his cancellation and a new offer. While I was waiting to get his cancellation I went and found a new buyer at $75K. I turned in the cancellation and a new contract to the title company. I sent my old buyer a rejection of his offer. He was not happy. Anyhow my new buyer is STOKED.

Fifteen minutes after I dropped off the contract to the title company, I receive a phone call from another party that wanted the house and said they were willing to pay $90K! I told him that I was sorry but “I keep my word.” I thought a little more and decided to call my buyer to see if they would be interested in making a fast $10K. They agreed to my proposal! So I get the signed cancellation, again, a new contract, again and take it to title. We closed on the deal yesterday and funded today. It broke down like this: my second buyer got a check for $10K just for signing a couple of docs, boy were they ready to adopt me! My Realtor made $5400 for sending a few faxes (I needed her to make some money so that I could keep getting her help). My seller got a little over $45K and loved it. I got $26,323.49 for my efforts. It took a while to finally land a good size deal, but it’s worth the wait. All my creditors will be zeroed out and I will still have a bunch for reinvesting.

Jason H.
Albuquerque, NM

I NOW HAVE A CLEAR UNDERSTANDING OF HOW TO EVALUATE A PROPERTY’S CASH FLOW

Working with my coach at Prosper Inc helped me get a clear understanding of how to evaluate a property’s cash flow. I remember him saying, ‘Trust your Numbers!’

I found a commercial/residential building with four apartments and two commercial spaces. In the beginning, I thought I was getting a great deal because I was dealing directly with very motivated seller (no brokers involved, means another 5-6% discount), plus the seller accepted my offer of $280K for a property listed for $350K. I remember being very excited and ecstatic about owning a building in a town that is undergoing revitalization, but my excitement was short -lived.

Todd walked me through a systematic analysis based on current market structure and condition of the property. We went through the income and operating expenses, maintenance, vacancy rates and minimum profits for each apartment. At the end of the coaching call, it was clear it was not an ideal situation for investment because of the vacancies and scope of repairs involved.

A few weeks past, we continued to negotiate. From $280K to $255K to $220K…down to $210K. It was beginning to make sense with these numbers, however, the building need extensive work. I don’t want to carry the mortgage while I am renovating, as there won’t be rental income coming in from the commercial spaces and two other units.

I proposed a lease-purchase to the seller, where I will pay him $1,000 rent per month for the next six months. I get to fully renovate, the seller continues to pay for the mortgage, all the utilities, taxes and insurance while he keeps the rental income from the two apartments. At the end of 6 months, the seller credits me back for total rent monies at settlement. I reduced my out of pocket expense tremendously. Creative financing allowed me to purchase this building and helped end the seller’s misery. This turned out to be a really GREAT deal!!!

I am very grateful for the knowledge and confidence I gained in the short time that I have been in coaching. Having a coach to guide me took the emotion and fear associated with investing. Now, I am more relaxed and looking forward to buying another property. It is money well invested!!! Coaching works!

Carmina M.
Malvern, PA