First Deal Jitters
Hi. After reading up on real estate investing (and frequently this site for the past year), I've finally gotten up enough courage to arrange my first deal. Wholesaling and foreclosure is what I'd like to go into (and not to mention assignability).
I have a mentor I'm working with who informs me that the best way to find a property is by looking through the classifieds and driving through my area for FSBOs.
I guess my question is, is there a better place to look for potential (and motivated) sellers?
And is not having any money a problem? (provided I don't get laughed out of the forum for asking this).
Thanks in advance.
No one will laugh you off...I think the best way for you is the best way for you...as long as it works. Think positive and find the cure for "analysis parlysis"!
For me, I'm a hands-on kind of girl. I've been sitting around totally paralysed with 'paralysis of analysis'.
For me, it's either do something or wait another couple of years figuring out if all this will work for me.
My first deal I wish to do (within three months) is the wholesaling and assign (find a suitable property with motivated seller and have someone take my place as the buyer). I'd like to do at least one deal in three months.
One thing that's stopped me is I"m in an area devoid of real estate investor groups. But as I said before. I need to get started almost right away. I have the motivation and the knowledge. I wouldn't mind some extra advice or pointers, though. I just don't feel like I"m getting the whole story on wholesaling/assignability.
Thanks for the response.
I think you could spend about 2 hours surfing around here and find as much info as you would at a year of group meetings. Not to take anything away from the groups, as they are a great place to network and learn, but I think this site is like a double shot espresso of RE knowledge! Keep thinking positively...consider the absolute worst thing that can happen, then realize, "it ain'tthat bad", and go for it!
The worse thing that can happen is absolutely nothing.
I feel like I"m in this all by myself, which is why I've procrastinated getting into REI, especially the wholesaling/switch over aspect of it.
My last attempted contact with an REI group here in the state was a bit disasterous. They wanted to sell ME a house to invest in.
I've been on this site fore the past three months and have read some remarkable stories, especially of ones where people at the age of 19 getting involved in this and actually making it work.
I also read somewhere that it doesn't matter who you learn REI from (gurus or other sources) it's what you do with the information that's the most important.
So I'm at a point where I want to get started right away. Just a bit nervous about it, that's all.
You mught want to consider starting a REI group and see what happens, I think you might be surprised. You are in excellent company here and as far as I'm concerned, the best group of mentors you will ever come across. I dont think it matters, how old you are, or young for that matter. I think we allare a bit intimidated when it comes to getting started. I was and I still am, but I know that the jitters will subside as I do more deals. I am turning those jitters into sheer excitement for my own sake! Gotta keep things positive and continue on!. Good luck!
Well, this about the only thing that makes sense, since I"m young AND unemployable.
The problem is I live in a region where there ARE no REI groups and I feel like I have to go all this alone.
Ah well. Beats doing nothing, which is essentially the worst that can happen.
I mean if people on this board can do this, why can't I? (:
Now as far as looking for suitable properties for wholesaling, are the classifieds the only place to look? If you don't mind me asking.
ROFL
First: Girl are you single? Cute?
btw: I started at 13 or 14 in real estate..
yes, I'm the most unusual person you'll ever meet..
Okay, onto biz..
If there are NO rei groups in your area, this means there is minimal competition in your area (as bigger areas, and more investors=groups)!! A Good thing..
Personally I have the opinion that REI groups are worthless, if you get something from them, great.. that's my experienced and knoweldgable opinon only.
On the topic of HOW to find deals.. Oh friggin wow!! This is the most basic concept and yet only .0001% of "investors" get it, in my opinion.
You want to know where to get the most deals and best deals? I'll tell ya!! UNADVERTISED properties!!
Think about it for a minute.. anything not advertised won't want cash out and top dollar, eh?
As well, there will be no other interested buyers or investors, since it's UNADVERTISED!!
Now your asking the 'annoying' question where do I find unadvertised properties which are potentional buys.. THINK ABOUT IT!!
You figure out, what are UNADVERTISED properties, and how to find them, and find the owners.. Good luck.. Getting rich ain't quick and easy!! And the harder means the more profitable..
Vacant properties!!!!!!!!!!! Empty for rent properties!! Inherited properties!! Expired MLS listings (homes that didn't sell, thus motivated sellers).. Condemned properties..
Getting the picture??
You won't go far, nor quick if your like every other 'investor' only knows how to focus on active MLs listed properties, fsbos, or newspaper ads.. As they all have competition for being purchased, seller wants top dollar, and wants cash.
This career is VERY time consuming to be successful and monopolize..
Oh, heck, I've babbled and offended enough.. HAPPY NEW YEARS!!
Chris,
Best deals are unadvertised properties.
Where to find un advertised properties:
1. Yes read the FSBO & FRBO in the classifieds & watch for the ones that are there for a very long time.
2. Pick your farm area & post Bandit Signs (www.BanditSigns.com)
3. Drive your area with a sign on your car that you buy houses and look for run down and vacant propertys or properties for sale or rent with little bitty signs in really tall grass or taped to a window. Get out of the car & read the sign & post your own flyer that you buy houses.
4. Look up the owners of the houses from above and sent them a letter.
5. Contact your local realtor and offer to pay them a small fee to set up an auto mailing of all the expired listings in your area. Their system should be able to set up & automatically email you as they come out.
6. Contact the local courthouse to see where they publish their legal ads: foreclosure listings, bankruptcies, probate, divorce, tax leins, judgements, etc - get this publication and mail these people.
7. Purchase a list from a list broker of absentee owners (especially out of state). Homes owned free and clear. Homes with older mortgages, with newer mortgages, with high interest rates, what ever would be a good motivated seller for you (you could possibly look this info up at the local courthouse for free or purchase from the local courthouse) I like ****Must Reach Freshman Investor status before posting URL's***, but there are many others.
8. Post an I buy houses ad in the local paper or thrifty nickel/penny saver.
9. Post flyers that you buy houses in the public places in the area you buy.
10. Flyers on cars at Wal-Mart.
11. Contact probate attorneys and foreclosure attorneys and ask for leads
12. Contact title companies and ask for a list of lis pending weekly in exchange for using them for your title work.
13. Check out web sites that list REO properties for sale (lots of links at ****Must Reach Freshman Investor status before posting URL's*** to REO companies) and get in touch with the listing agent and ask to get put on their emailing list for when properties come out.
14. Network with other investors - if there is no group in your area start your own. Put an ad in the local paper that you are going to have a networking event on the 2nd Saturday of the month. Find an eating establishment with low patronage for that day & you may be able to get the room for free, Contact your friendly title company or Realtor, they may be able to offer you and office, or try the local library. Meet for an hour and exchange leads & ideas.
I read that many people do not learn much from their groups, but it depends on the group. If put together correctly, it will draw membership, with a larger membership it will draw sevice providers that may offer group discounts to the group, with the group discounts the associaiton will draw more in membership, and the larger the membership, the more likely the group will be able to host a national speaker that will come in an talk for 2 hours to all day about their subject & possibly sell their how to product at a discount to your group. (The groups that are run as a business with the investor as the client are very beneficial to everyone and can be a very profitable business)
[addsig]
Expired MLS listings? Hmm. Good thing I'm seeking out more than one source.
The mentor I'm working with tells me not to use expired MLS listings (and yet you wonder WHY I've said I don't entirely trust him?).
I've NEVER, EVER felt that using FSBOs and classifieds were going to be helpful to me. I don't like competition.
I don't mind doing the work, though (as long as it's for myself).
No I'm not single. In fact, my SO would like to also help me with deals. And I turn 28 in about a month or so.
To make a long story short, I'd just like to know where to start, and go from there.
Being that I've spent so much time with paralysis of analysis and being surrounded by unsupportive people and dealing with hostile REI groups (ones that don't like the words 'no money down' and deal mentioned in the same sentence), I decided to just do something.
SOrry if it seems like I'm saying too much.
sml,
you should put together a map of where you want to go and how you will get there.
It looks like you have your strategy... now map it out. Call it "the simple steps to get started, by sml"
Example
Step # 1 Where will you look for leads for the way you want to buy. (vacant properties, divorce situations, job transfer/relocations)
Step # 2 How will you market to these people (bandit signs, mailings, door knocking)
Step # 3 Start marketing campaign and wait for responses.
Step # 4 Once you have a potential seller, how will you structure the deal.
Step # 5 What to do when you have an accepted offer (Qualify the lead make sure it meets your perameters of what you're looking for-equity wise/profit margin for you and your potential investor/buyer)
Step # 6 When they accept, get your paperwork signed. By the seller and your buyer.
Step # 6 After the deal closes, go to the bank with a smile on your face and cash the check after.
This is just an example of how to get started...I just wanted to stimulate your thought process on how and where to begin.
Hoped this helped!
And that would be MY shot of espresso ( :
I'll have to bookmark or save this page.
I just need to develop a plan for the next few days.
thank you ( :
I just remembered something.
WHen it comes to agreements and contracts, what kind is usually the best to use for seller and buyer?
My other question is where would I go in my state (or even county) to register an LLP and LLC? I realize that this is pretty important to do.
thanks.
I though Chris was on crack for a second. Don't worry Chris, it all clicked as I read on. BTW, don't worry about your LLC. You should have one goal...how tobuy your first prop.
I think I caught on that you have no job...in that case I might suggest you read up on the sub2 forum, and figure out a way to borrow 5-15k from a relative. Also, get a place with a lot of rooms and rent them to your friends. You can live rent free and maybe make some cash. Fix and sell to raise cash. Deals seem to come easier when you got a nice wad to back you up.
[addsig]
this was all great info. but i have a wierd question for you sml ... are you left-handed??
*your smiley's are backwards!*
Quote:
On 2003-12-29 22:05, sml wrote:
And that would be MY shot of espresso ( :
thank you ( :
You don't need to borrow 5k-15k from anyone for doing sub2 deals. (be creative) You can aquire them for as little as $10. Then it will depend on what you want to do with the property once you have it. You can sell it "as is" and have your potential buyer do the fix up. Or, you can assign it to another investor.
If you plan on getting into making up back payments, you may need some extra cash for that, but if you have a lease option/tenant buyer, their deposit can cover the back payments from the lender. Or, do a work out plan with the lender, and see if they will let you send in a smaller amount, and put the rest at the end of the loan or make the payments monthly.
Don't let having no cash deter you from getting started, you just have to be creative......plus, the more cash you have, the easier it is to throw it at all of your problems, instead of thinking of how you can get in with the least amount out of yours or someone elses pocket.
Thanks. Sub2 deals? Ah. More reading ( :
Yes, I'm left handed. (well, predominantly left-handed, but for the most part, I'm ambidextrous).
I'm not totally unemployed. THe problem is I hardly make enough money. I just remember the last time I became intensely interested and had posted to a group, I was essentially laughed at.
The last time I asked my mentor about expired-MLS listings, he tells me they're illegal and essentially deterred me from them. How would I go about getting one? (as to generate leads).
Thanks so much for your help to those who posted to my question.
( : ( :
sml:
DOH!! (In my best Simpson voice)..
It sounds like you really don't know where to get started..
That being the case, just go BY a house.. It's easier than it sounds..
HAPPY NEW YEARS
and a wonderful white winter wonderland!!
Chris,
Well, I do know where to get started...but I"m not sure...does that make any sense?
I was always under the impression that to find a motivated seller, I had to sift through endless pages of classifieds and look for FSBOs. Of course, my mentor told me this. I'm not so sure now because the prospect of cold-calling doesn't appeal to me, and in my experience, it doesn't always yield a motivated seller (which is essentially the holy grail of REI).
So I know what I'd like to do. It's just beginning. I don't want yet another three years to pass by.
You do NOT have to have money of your own to do real estate. You MUST, however, know how the financing of the deal is going to work. Are you going to assume their mortgage and do a defered settlement? Assignment? Hard money? Private money? Double close? There are many different ways to do deals without using your own money but you need to know those techniques. Finding the Motivated seller (aka "property"
is only half the battle. You only need to know 3 things:
1. Is it a good deal?
2. How will I buy it?
3. How will I sell it?
Granted, those are very broad questions, and there are many more things to know, but go through each scenario in your mind or talk it through with someone. Once you can answer those, you're ready to move forward.
more than likely, I'd prefer to do a double closing. I've picked up some info, however, that there's title companies that don't do double closings.
Meanwhile, until I can get to a point where I can get motivated sellers ringing my phone off the hook, I'd like to know if getting an expired MLS listing would be a good option for me.
I'm interested in finding a way to get a hold of motivated sellers. And take it from there.
I've considered going down to the local courthouse and looking at leads through bankruptcy and probate.
Check out Vena Jones-Cox Mega Deal FInding Pack at www.regoddess.com. I do not know what it costs, but it is money well spent.
I started with vacant, ugly properties. They are also good candidates for wholesaling - flipping.
Brenda
I checked out Vena's website. Unfortunately I couldn't find a price for her Her price for a seminar is around $500 per couple.
Meanwhile. I've accepted the fact that having little to no money for my first deal isn't that much of a problem.
Just looking around my neighborhood (and any place I've driven), I haven't found any vacant houses (just rundown houses in bad neighborhoods).
What other ways can I find a target property?
sml, maybe you don't want to get into this, but if the rundown buildings in the bad neighborhood are vacant, why not pick them up for starters? just flip them. i never shy away from the tough side of town because no matter where the home is, SOMEone has to live there! also, if it costs you virtually nothing to get, why not explore it. it's almost like free money that doubles as free experience!
going during the early morning for your inspections should yeild little problems.