3. Plan Blog

Leverage People and Money


Looking back on December I had a record month. A record month so far. When I looked closely at the deals it became obvious that I had earned a lot of money but I also had paid out a lot of money. I paid a lot of money to sales people and investors.

There were basically 3 types of deals that we worked on in December, 2009. We did 4 sandwich lease options, 3 Buy Fix Lease Options and 3 Assignments. The Gross Profit was $254,000. The total commissions and splits were $104,000. My Net Profit was $150,000. Here is an example of each type.

  1. Sandwich Lease Option Deal #1

Option Price         150,000

Purchase Price      (130,000)

Gross Profit           20,000

Commissions            (3,000)

Net Profit           17,000

  1. Buy Fix Lease Option Deal #1

Option Price         170,000

Principal Profit           10,000

Purchase Price      (128,000) (after renovation)

Gross Profit             52,000

Commissions            (6,000)

Net Profit           46,000

JV Partner           23,000

My Net Profit        23,000

  1. Assignment Deal #1

Assignment Price    297,250

Purchase Price      (290,000)

Gross Profit               7,250

Commissions            (1,500)

Net Profit                 5,750

The key message here is that I was able to make a lot more money by leveraging other people’s time and money than if I had tried to do it all myself with my own money. You should always be on the lookout for ways to partner with other people who have time and money to contribute to a deal.

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