Too Early to Build Team?

[Alaura Mannor]

Hello all! 

I have posted here before, but I didn't actually introduce myself last time! My name is Alaura, I am currently a stay at home mom of one. Just moved back to Texas after husband left the military, and getting geared up to start building our civilian life. We sold our house before leaving his last duty station and made a nice little chunk off that and are looking to start investing in real estate with it while we use a 0 down VA loan for our primary residence. We have only ever purchased a primary residence (and only once at that!) so we are trying to learn as much as possible about it beforehand.

My question is about building a team well in advance of buying. So right now, we have very minimal income (GI bill, reserve pay, savings to cover anything over that) and won't until husband gets out of school and gets hired, probably around June. Our plan is to try to buy our primary residence after he has a job, and buy an investment property as soon as possible (within reason) after that. But I am wondering if I will get laughed at trying to build a team so far in advance? I hate to leave anything to last minute, but I don't want to waste peoples time (mostly lenders and mine) if they are just going to tell me to come back when we have a stable income. 

And a follow up question! If we only have one month of income on record other than previous military service, will lenders give us the time of day? Will rates just be very high? Will they require a big down payment? 

Thanks for any help! 

[Alaura Mannor]

Quote from @Linda Weygant:

Quote from @Alaura Mannor:

Quote from @Linda Weygant:

I can speak to one member of your team - the CPA - as that is my area of specialty.

As a beginning investor, you don't necessarily need a CPA before you begin, but it's one of the first things you'll want to have once you're under contract.

Depending on what you want to do, a CPA can guide you through tax strategies in the beginning, so that all of your taxes are minimized to the degree they legally can be.  Many folks wait until too late to get a CPA and end up in a situation that can't be optimized.

Make sure you're set up for optimization.  I recommend interviewing CPAs now, finding one you like, then let them know you'll be back in touch when you're under contract.  This will set you up for success from the tax side!

Best of luck!

Thank you for your input! I was actually about to start a search for a CPA for my other business I am starting up, but now I wonder if I'll need two separate people who are more experienced in the fields I am going to be getting into? Those real estate investment and separate unrelated small business? 

 You'll be fine with one CPA for both businesses, if that CPA is a specialist in both areas.  Send me a PM if you want some ideas on making sure you're connecting with the one that's right for you.

 Thank you very much!

[Alaura Mannor]

Quote from @Basit Siddiqi:

I think you should think about educating yourself prior to networking with professionals. 
The more information you know, the more the professionals can help you.

Below are some things I would zone in on the next 6 months
1) What market do you want to invest in - Get very specific by focusing on a zip code or neighborhood.
2) What size property do you want to buy? Small properties that are 2 or 3 bedrooms or something larger like a 4 or 5 bedroom house?
You possibly want a multi-family house?
3) What condition of a house do you want to purchase? 'turn-key condition', paint and lipstick or a gut rehab?

I think once you know the above you can properly communicate with the professionals

Best of luck

Thanks for your input!

[Tyler Fontaine]

Quote from @Alaura Mannor:

Quote from @Tyler Fontaine:

I'll do my best to keep this brief for you.

Currently you are in what I call the prep phase. This is where you're planning, gaining knowledge, establishing relationships, and getting ready to dive into the game.

These are the things I would be focusing on in the meantime;

1. Build your network. Get in touch with investor friendly realtors, speak with mortgage lenders who can guide you through what needs to be done to get an approval, familiarize yourself with the local Property Managers/Flippers/Wholesalers, and start talking to other investors in your area. Attend the local REIA, get in the FB groups, meet for coffee etc.

2. Learn how to analyze a deal. Understand purchase prices, scopes of work, getting comps for ARVs. Get to know the terms cashflow, cap rate, cap ex, noi, dti... Basically get familiar with how you can run numbers on a house to get to what your best possible offer could be. 

3. Check NAR and FreddieMac at least weekly and go over some of their blogs to get a sense of where the market is, where it's going, and so on.

In regards to your last questions, you may as well call a local lender and ask them. Good ones will tell you and help you prepare for when you're ready to buy.

Thank you so much for your response, it makes me feel a lot better to read that because that's a lot of what I'm doing right now! Just learn and preparing. My biggest hang up I suppose is understanding how to network without feeling like I am wasting people's time. I am on a few local real estate pages on Facebook, and I'll definitely look into REIA in this area. Thanks for your input! 

 Ahh, not wanting to waste their time... You already have the right mindset. It's about value exchange. Being honest, some of the sharks in the game simply wont make time for you right away. But, the industry is filled with tins of people who want to lend a hand-up to those just getting into it. 

You can provide value in little ways. Giving someone your full attention and asking good questions when they give you time of day is crucial. 

Simply showing up to networking events and engaging with people -- starting to build REAL relationships goes a long way. Following up with people based on previous convos is also valuable. How did their last project finish? Did they lock up that deal they mentioned to you? What's going on with the wife and kids? Did the daughters recital go well?

Then you can get creative. So my current boss I was introduced to via listening to his podcast CashFlowKings. Over time he had speaking engagements with investor meet ups or he would do property walkthroughs, offering to explain to peers what the deal was. I attended all of these that I could. One day he needed help demoing a unit... I showed up and worked for free. My man loves cigars and the gym. So a couple times a month I'd call him and ask to catch a work out or go light a fat one. 

Fast forward. We talked business, the relationship grew personally, and now we work together. There are many ways you can contribute :)

[Alaura Mannor]

Quote from @Tyler Fontaine:

Quote from @Alaura Mannor:

Quote from @Tyler Fontaine:

I'll do my best to keep this brief for you.

Currently you are in what I call the prep phase. This is where you're planning, gaining knowledge, establishing relationships, and getting ready to dive into the game.

These are the things I would be focusing on in the meantime;

1. Build your network. Get in touch with investor friendly realtors, speak with mortgage lenders who can guide you through what needs to be done to get an approval, familiarize yourself with the local Property Managers/Flippers/Wholesalers, and start talking to other investors in your area. Attend the local REIA, get in the FB groups, meet for coffee etc.

2. Learn how to analyze a deal. Understand purchase prices, scopes of work, getting comps for ARVs. Get to know the terms cashflow, cap rate, cap ex, noi, dti... Basically get familiar with how you can run numbers on a house to get to what your best possible offer could be. 

3. Check NAR and FreddieMac at least weekly and go over some of their blogs to get a sense of where the market is, where it's going, and so on.

In regards to your last questions, you may as well call a local lender and ask them. Good ones will tell you and help you prepare for when you're ready to buy.

Thank you so much for your response, it makes me feel a lot better to read that because that's a lot of what I'm doing right now! Just learn and preparing. My biggest hang up I suppose is understanding how to network without feeling like I am wasting people's time. I am on a few local real estate pages on Facebook, and I'll definitely look into REIA in this area. Thanks for your input! 

 Ahh, not wanting to waste their time... You already have the right mindset. It's about value exchange. Being honest, some of the sharks in the game simply wont make time for you right away. But, the industry is filled with tins of people who want to lend a hand-up to those just getting into it. 

You can provide value in little ways. Giving someone your full attention and asking good questions when they give you time of day is crucial. 

Simply showing up to networking events and engaging with people -- starting to build REAL relationships goes a long way. Following up with people based on previous convos is also valuable. How did their last project finish? Did they lock up that deal they mentioned to you? What's going on with the wife and kids? Did the daughters recital go well?

Then you can get creative. So my current boss I was introduced to via listening to his podcast CashFlowKings. Over time he had speaking engagements with investor meet ups or he would do property walkthroughs, offering to explain to peers what the deal was. I attended all of these that I could. One day he needed help demoing a unit... I showed up and worked for free. My man loves cigars and the gym. So a couple times a month I'd call him and ask to catch a work out or go light a fat one. 

Fast forward. We talked business, the relationship grew personally, and now we work together. There are many ways you can contribute :)

Thanks for your input! Great point about providing value! 

[Adam Bartling]

Meet more people, make a small data base of their investment interest.  And just keep in touch and kick ideas by each of these people that you think might fit.   More contacts the better.

[Shawn Winters]

Alaura,

Been doing this around 20 years and have a nice little portfolio that I manage and provides a comfortable lifestyle.  The three most important people you need: accountant, attorney and insurance broker.  Do a little research or ask around at a Reia meeting who to use.  Do not underestimate the knowledge of these key three.  

Not only for their professional advice but they can share “war stories” of other business people in your area that you can learn from.  They are also in a unique position to introduce you to property managers, contractors, suppliers, you name it.

Like I said I’ve been doing this a long time now and I still do not make a major decision without a phone call or email to all three.  Often they give me conflicting advice….but that’s ok.  

[Alaura Mannor]

Quote from @Adam Bartling:

Meet more people, make a small data base of their investment interest.  And just keep in touch and kick ideas by each of these people that you think might fit.   More contacts the better.

Thank you for your input! 

[Alaura Mannor]

Quote from @Shawn Winters:

Alaura,

Been doing this around 20 years and have a nice little portfolio that I manage and provides a comfortable lifestyle.  The three most important people you need: accountant, attorney and insurance broker.  Do a little research or ask around at a Reia meeting who to use.  Do not underestimate the knowledge of these key three.  

Not only for their professional advice but they can share “war stories” of other business people in your area that you can learn from.  They are also in a unique position to introduce you to property managers, contractors, suppliers, you name it.

Like I said I’ve been doing this a long time now and I still do not make a major decision without a phone call or email to all three.  Often they give me conflicting advice….but that’s ok.  

Thank you for your input!

[Ronald Rohde]

I'd say its a little early for some team members, but fine for others. The key is knowing your own goals as Henry mentioned, figure out your asset class and route first. It'll make the team search that much cleaner and efficient.

You can do the trailer home route, Pecunia non olet

My client does RV parks, has 10 acres as primary residence in TX, increased the value 10x, BUT his neighbors all have high end homes $2m + he lives in $2m house, but he has 30 pad sites in his backyard (separate entrance) anyway, you choose your life! 

[Alaura Mannor]

Quote from @Ronald Rohde:

I'd say its a little early for some team members, but fine for others. The key is knowing your own goals as Henry mentioned, figure out your asset class and route first. It'll make the team search that much cleaner and efficient.

You can do the trailer home route, Pecunia non olet

My client does RV parks, has 10 acres as primary residence in TX, increased the value 10x, BUT his neighbors all have high end homes $2m + he lives in $2m house, but he has 30 pad sites in his backyard (separate entrance) anyway, you choose your life! 

Thank you for your input! 

[Clint Galliano]

Start building relationships with the people who could possibly be on your team one day, today. If you are able to work, get a job in a real estate-related business to learn the players and the market. 

Find a local REIA(s). Join & attend meetings. Lots of people who may one day be on your team attend these meetings. Build relationships with them.

Select a goal of what you want to do, build a plan on how to get there. Detail what steps your will need to take.

Practice deal analysis in the chosen area of investment so you will start to learn what is a deal and what isn't. 

Work on building your dreams.

Clint