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RG 038 – Deal Structuring 101: How to Structure the BEST Deal Possible! with Luis Carrera

Deal Structuring 101: How to Structure the BEST Deal Possible! with Luis Carrera

 

About Luis:

  • Luis is originally from Spain
  • He was a civil engineer before he found real estate
  • He has completed over 250 real estate transactions

 

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Something unrelated to real estate?

  • Luis’ favorite thing is football (soccer)
  • He has found places in the US to keep playing.

 

Nuts & Bolts

Luis moved to the US from Spain with his parents and trained to be a civil engineer, however the corporate life was not for him and he moved into real estate and wholesaling. Luis has a local wholesaling business in Raleigh and North Durham with his business partner. In this episode Luis gives advice about the best way to structure deals whether you’re wholesaling straight from the seller or working with an investment syndication.

 

The most simple wholesale deal structure is where the owner approves the deal and you earn 70% of the sale cost minus repairs and the wholesale fee. However, things are rarely this simple and many of Luis’ contracts have “subject to” added. This might be because the wholesale fee for the seller is less than the cost of their mortgage so the contract will have to be worded “the owner agrees to convey title subject to an exact wrap of existing note”.

 

When you are working in real estate the most important thing is to market yourself properly. Even if you don’t have much money coming in, Luis recommends taking $20 and creating homemade signs saying “We Buy Houses” which can be used for up to 2 months. Luis has found that for every 20 leads made through marketing, 1 is a wholesale purchase and four are “subject to” contracts.

 

When a property owner says no to a wholesale and a “subject to” agreement Luis does a joint venture. This is where they split the profits from the sale and Luis takes on any construction costs. The thing to remember here is that a joint venture isn’t an agreement for sale; it’s just a project that you’re both working on and striving for a sale down the road.

 

Luis also works with hard money investors and advises that in these cases the most important thing is your relationship and what they will get out of it rather than the actual deal. Luis marks time in his calendar to visit attorneys, doctors and professionals each week to build up relationships. Each time he asks them to invest and in one case it took 8 requests before he secured investment. You have to get used to hearing “no” but the more you ask the easier it gets.

 

Top 5 investing tips:

  • Most successful habit? – Goal setting and keeping the calendar full
  • Most influential tool in your RE business? – His phone and Luis recommends getting unlimited minutes.
  • Most exciting project right now? – A redevelopment of empty land.
  • Most influential person in your career? – Hi energy was focused into RE after reading Donald Trumps’ book ‘Think Big and Kick Ass in Business and Life’ and his mother.
  • Contact – phone 973 902 7203 and email innovativeholding@gmail.com

 

Until Next Week, Happy Investing!