The Time Machine

[Brootal]

Hey everyone!

I am currently developing my plan and would like some ideas from the ones who have made it successfully in the real estate game. My hope is that I (and other newbies) can learn from your success and hop on the fastlane faster.

Imagine that you now have access to a time machine and can go back to your start but retain the knowledge you have gained over the years.

You are back at square one, so cash is limited to say $5,000. You are renting an apartment and work a full time job. The goal is get out of your job, and earn finacial freedom in the shortest amount of time possible. All real estate vehicles are fair game!

How would you rewrite the plan that you were going to follow for the next few years to break into the fastlane?

Please offer your stories and advice. I appreciate it and would imagine other newbies here would as well.

Thank you!

 

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[dollarBlogger]

JScott has a fantastic business plan posted on his website. I would highly recommend it to anyone.

Real Estate Flipping Business Plan

~dB

 

[MonTexan]

Brootal,
Your goals sound much like my own. Some suggestions based on the path that I have taken: read all the investing/business/mind-set books you can get your hands on. When you're in the car, listen to those books on CD - check out SimplyAudio.com - it's like Netflix for audio books. I love it. Get around like-minded people. Are the people at your j.o.b constantly negative and bitching about office politics? Don't go to lunch with them. Find positive people to be around that like to talk about building something for the future.

Maybe you'll find a business partner in the course of seeking these people out. Now your $5,000 becomes $10,000 for a downpayment on a $50,000 rent house. Sure you'll only own 50% of it, but you'll be in the game! I partnered up with someone, researched about 10 different markets in my area, and decided to buy a duplex for about $45,000 with the attitude that if it went to hell-in-a-hand-basket we'd still be ok.

You'll learn more from that first deal than you did reading all the books in the library. This is where most people stop by the way...actually buying something. Just do it. What's the worst that can happen? It doesn't get rented and you have to split a $450 mortgage payment between the two of you? If you're stuck thinking - "what about the toilet breaking, what about vandalism, what about dead beat tenants, what about ...." you look back in 20 years and be exactly where you are today with many regrets.

The bottom line is take action to land that first deal! After that, the deals become much easier. Pretty soon you'll be looking down at over a million dollars in real estate and a nice cash flow with great satisfaction. I've finally gone over the $1M mark (buying CHEAP properties) and it's a good feeling. While I'm not out of the rat race yet, I'll get there eventually. It's all about getting that first deal under your belt....

 

[yveskleinsky]

Don't gloss over JScott's advice to find successful investors in your area and take them out to lunch. I think you could ask anyone on this forum, and we'd all agree that finding someone who is already successful at what you want to do will shave years (maybe even decades) off your fastlane journey.

 

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[Brootal]

Hi everyone!

Thanks for the replies so far. I most certainly have not glossed over JScotts advice. I took it to heart and started busting a$$.

Since I have posted this I have been working like a madman around my regular 40 hr J-O-B. Here's what I've been up to:

-Narrowed down my focus to wholesaling. I dont have enough money to really get started anywhere else and this will provide a good basic understanding of real estate, my area, and the values associated with property.

-Visited 12 open houses to see whats on the market. I still have a lot more to go but I am seeing whats out there.

-Joined a local real estate investor meet-up and attended two of their meetings. I decided to join and for $100 a year I thinks its a pretty good buy.

-Compiled a spreadsheet of all the houses that have sold in my "farm area" within the last 8 months, their selling price, and their appraised value. I then made another column with the percent difference. This showed me that on average, houses in my area are selling just under assesed value. My list has over 90 properties so I would think this is at least somewhat accurate. I would appreciate comments on this.

-Found a title company that does assignments and double closings and understands real estate investing in general.

-Set up a website / squeeze page. Still need to tweak this a bit but at least its up. I am no web designer but for my first site its not to shabby.:groove:

-Found 3 realtors that "would be interested" in working with me. I have yet to do anything other than use them for comps yet so I am not sure how long they will want to continure to work with me.

-Started advertising my squeeze page on Craigslist, backpage, kijiji etc. Have had a few leads so far but nothing great.

-Had business cards printed to hand out at investor meetings and to anyone else who I come across.

-Learned how to use all of the local GIS sites.

-Added 12 new buyers to my buyers list.

-Put in 3 cash offers on leads from website.

-Attended a "subject-to" course that was offered by one of the people at my real estate meet-up group. This gives me another offer that I can make to investors that dont have all cash.

So in all its been a fairly busy month. I am still frustrated at my lack of having a deal go through but I figure this will come with some time. I also feel that the people I have made offers to dont take me seriosuly because of my age (24). I had one lady flat out ask me how anyone my age would have enough to offer cash for a house. I explained that I would be bringing in another buyer and things just went down from there. I need to determine if this is in my approach or if shes just freaked out.

My goal for December is to start a successful marketing campaign through direct mail to out of town owners. I will buy a list through a local data provider and start with letters followed by postcards.

I want a deal completed by the end of 2009. I want it so bad I can taste it.

I would appreciate any helpful responses on what else I should do. I have a little over $12,000 saved to build my business with and my budget right now for marketing is $200 per month. I do plan to buy a new laptop next month as my current desktop is on its way out so I will need to use some of the cash there.

Thanks!

 

[MonTexan]

Great job on taking lots of ACTION! Sounds like you're very dedicated, and that's exactly what it takes. I've never been a big fan of wholesaling, but that's where everyone says to get your start. I see so many new wholesalers getting discouraged in this market though....stay focused on your goal of getting at least one deal done this year and I'm sure it'll happen for you!

 

[Brootal]

Montexan-

Is there really any other way to get started with little money?

 

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[MonTexan]

Yeah, by partnering with someone. That's how I got my start. You may also come across some good "subject-to" deals in your marketing efforts where you can just take over a property subject-to the existing financing = zero down. These are pretty plentiful today as lots of folks are happy to just hand over the keys if you start making their payments.

I'm certainly not a huge "zero cash, zero credit" huckster, but there are deals out there that don't require a lot of cash to get into. With your tenacity, you should be able to find them.

 

[dollarBlogger]

I took it to heart and started busting a$$.

Speed ++ for massive action.

Way to go Brootal! Keep up the great work and be sure to update us on your progress.

~dB

 

[hatterasguy]

The age thing is easy to get around. I'm your age and people never give me flack for it. If they ask where the money is coming from I just say I have a good partner or family member with a lot of cash. (which I do) But just make up a good story and stick with it, fake it until you make it as they say.

 

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[EastWind]

if many people got a time machine, they will end up at the same spot, it's not the knowledge, but the mindset, the desire and passion, the effort and tenacity, the hardwork, knowledge and ideas are cheap.

 

[Brootal]

Hey everyone! I have an update and would also like some serious advice from you guys (and girls).

As some of you know, I put in a massive amount of effort over the last few months to get a wholeale deal done. Things moved along quite nicely and I got two deals under my belt!

My first deal was with another wholesaler in the area. He got the property and offered to let me help market it to help me build my buyers list. I marked it up $500 bucks for me and shot it to everyone I knew, put ads out and basically did everything I could.

In the end I got a buyer and collected my $500 from the guy I helped sell.

The buyer told me his criteria and I set out to find exactly what he wanted. Luckily I had already been marketing and had a few leads to chase down. I found another property put it under contract and collected another $4500 for my finders fee.

After both of these closed I was pumped. I slapped all 5 grand into paying down the little bit I have left on my car and took my gf to dinner.

Now here is where my dilemma is: When I first heard about wholesaling I thought it would be the end all be all for my road to the fastlane. I thought I would crank a bunch of these out and live happily ever after in my new RE career. Now that I have done a few I don't think that its something that I really want to pursue. I looked at it solely for the money and never thought about whether I would like it or not.

In short: I really didn't enjoy the process all that much and don't see myself doing this everyday and having fun.

Real estate still fascinates me and I would love to do some rehabs where I can actually get my hands dirty and do some work for myself, but I dont think wholesaling is congruent with my lifestyle.

Everyone that knows what I did thinks I am nuts for not wanting to go out and find as many more, but I dont think they understand. My friends from the local REI club think I need to keep going as well.

Am I crazy to not keep going? I feel super bummed out for that fact that I pretty much succeeded but feel like I failed if that makes any sense. Its odd because I never saw this coming and have never really felt like this before.

Would love to hear some opinions! thanks. :cheers:

 

[EastWind]

well, if you don't enjoy it much and the money is not good enough motivation, then you might as well find something else that motivates you. i personally think there are two types of motivation to fastlane, the first is the motivation that stems from just loving what you do and trying to be the best at it and providing the best value. the next is the motivation of money, and just focused and doing what works for you and gets the money even if you don't care for it.

good luck finding what you have passion for.

 

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[MonTexan]

Brootal,
Great job on getting those two deals done! I understand exactly where you are coming from. Simply making money may not be a good enough reason to pursue something you don't enjoy. The good thing is that you have this skill set in your repertoire.

With real estate, it's best to have several tools for making money. Why not pick up a couple rent houses now or do a couple flips to see if you have more passion in those areas? Wholesaling can be great for making "pay-the-bills money" and flipping can generate quick cash, but you also need to build wealth with a buy-and-hold strategy. I meet a lot of guys at local REI meetings that ONLY do wholesaling, but if that's your ONLY strategy you'll have to tie up properties and flip contracts forever. When you go on vacation your income stream also goes on vacation.

Again, great job and I look forward to hearing about your next deals!