Process Debate - Finding First Properties

[Bill Morris]

My wife and I are trying to find our first rehab. We have done tons of research and have 3 realtors working with us. My wife is getting frustrated and wants to immediately go to bandit signs, yellow letters (list source), web site formation, company name, LLC formation etc. I, on the other hand, just want to keep searching diligently and feel like we'll find our 1st flip soon enough (we've really only been looking for about 1 month.) Once we get through our first flip (and really our 1st 3 or 4), I feel like we'll have a better understanding of the approach we want to take and will be better suited to move forward with a purpose. Am I being too hesitant or is she putting the cart before the horse?

[Bill Gulley]

Originally posted by @Adam Stanton:

Not sure what @Bill G meant, but there is tons of fundamental education on this site.  Dive in to the podcasts if you haven't already.  

 Fundamentals of real estate are those aspects taught in state approved schools for those seeking a license, that type of education is non-existent here but there are comments in forums to that you may pick up,  if you recognize them.

Most here can't define real property and why it is valuable or explain why RE is unique and different fro other investments, The basis for valuations, nor have I seen much on the three valuation techniques of property and why one is given more weight than another. Markets are not defined nor is there much understanding of pricing to market, many can't define market value as it is legally defined. Not many understand how title is transferred nor what deeds are appropriate, what rights are transferred with a lease or option or installment sale or any outright transfer. I have seen anyone explain the theory of the bundle of rights. I think I'm the only one that has mentioned bi-lateral and unilateral contracts and what requirements there are to assign such contracts. Options aren't what the gurus tell you they are really, most don't understand what an option really conveys or how it is valued over time. I'd guess that most here have no idea of what meets and bounds would be about, much less links and chains, but that is how the property they might be buying is described. Won't even speak of a legal description "closing" as you can have title problems if they don't. Do most know what title insurance is? What's the difference between an encumbrance, easement or encroachment? Many folks here want to assign financing contracts, what is the priority of liens and how are they perfected? Need to buy a property that has a life estate? What the heck is that, they spend two weeks messing with some little old lady and then find out! We aren't even at agency law or basic contract law. And, there is much more.

I don't pull out 80% of my answers out of my ashtray, it comes from the basic fundamentals or RE. It's the big picture. Ever try to put a puzzle together without the box top picture? That's what most are trying to do, trying to fit pieces together without the bigger picture.

What we talk about here mainly are strategies, methods, of how pieces fit together. All strategies or methods used in RE have been around for hundreds and some thousands of years, yet the guru tells you it's new, the big secret, how to or they add some twist to an old idea, smoke and mirrors. If it weren't so pathetic it would be funny being able to see through the stuff spun out on new folks.

These fundamentals are the foundation of everything done in the industry. Folks don't see this area as making them any money next week. I dabbled in RE for about ten years before I began studying what RE really was all about, looking back I can tell folks they don't have a clue by trying to do strategies or some niche type deal. After I started all over and learned these aspects, it was like a light going off, everything fell into place, every type of transaction could then be organized and set in a logical order to address any opportunity I bumped into, you can then see if certain circumstances exist you move this direction. I didn't really start making great money until after I really learned. Before I thought I was making money.....I had no idea!

 Now, some of the old timers may recognize these fundamentals, mostly forgotten, but there are those that have been mulling along in RE for decades never knowing what they were really doing, they just knew how to fit many of the pieces together and could make some kind of picture with what they used. You can learn a lot over decades but street smarts costs you dearly. I don't see any of them playing in the Super Bowl, for that you need a play book and a rule book.

Things change in RE, we are constantly having to adapt and keep up. If you don't have these basics down, you won't be adapting in the big picture, everything will seem like a road block at every turn, unhappy, most will fall out of RE in 3 years!

I've been on BP for a few years now, I see them coming and going, only a very few who were here 5 years ago are still around. We also have the amateurs, the once in a while types, most in RE are, this is not their profession or main source of income and it supplements many very well. RE doesn't have to be a full time job, but a better education in the fundamentals will sure save them time, money and in many cases their reputations. You'll also see many of the amateurs turn guru or mentor or coach, it's much easier telling how it could be done than doing it or speaking from actual experience.

After being around this stuff for 40+ years, being involved in more aspects than I can mention, having suffered in the world of academia as well as the school of hard knocks, doesn't take me long to spot the fakes, the wannabe, the shyster, the inexperienced, the honest student, those with integrity and knowledge or the real professionals. Actually, I think I'm pretty forgiving......but that's why fire shoots from my fingertips as one member put it in another thread.

Everyone wants to know the secrets and just the part about making or taking money, just the easy stuff.    

Of course, none of this is directed at any one person or group, it's just my daily rant trying to light a fire under folks so they will get serious or get off the pot. :)