What would you do with $1,000?

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What would you do with $1,000?

Ben Roberts
Rental Property Investor · Memphis, TN · Member since 2015 · 203 posts · 135 votes

Background...

I'm in Memphis Tennessee and I've done a fair amount of research, enough to know that I need to jump in already. I have a little knowledge of my market and a little knowledge of real estate. I have a degree in Finance and a background in Data Analysis, Marketing, and Sales, and I currently work for a REIT.

Plan...

I think my best move is get started wholesaling.  I love the marketing, negotiating, and analysis (of both deals and marketing campaigns). I have my personal finances in order ( emergency fund, checking, savings, monthly budget ), and I only have $1000 to get started.  I think my first move is to buy some business cards, setup a website, get a list, and send out postcards (since they appear to be cheaper than yellow letters). I'd like to put half my earnings back in to generating more leads, and half in savings to pay cash for my first rental property.

Expected outcome?

The way I figure, I'll learn a lot about my market, as I go.  I'll sell properties to other investors, figuring out who is really killing it and what they're doing.  Watch and learn from them while providing them value.   

Does this make sense to anybody? What would you do with $1,000?

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Most Popular Reply

Julie Clark
Wholesaler & RE Broker · Seattle, WA · Member since 2015 · 42 posts · 34 votes
10y

@Ben Roberts  I love your question. It's a good one.  I am a full-time wholesaler in Seattle, WA.  The #1 key to success is volume of leads and your ability to convert them to deals, or none of the other stuff even matters.  Spend some of your up front education time learning how to effectively speak to sellers rather than focus all on the real estate part. Also focus on just getting a deal (lead) and the rest will fall into place.  If you get a good deal, everyone will be here to help & guide you on the next steps.  If you get nervous when you speak to a seller just do the best you can and say you will review with "your investment team" and get back in touch within 24 hours with an offer.  Then throw out your questions to the BP universe and to your local investment club network and you will get answers/help on how to proceed.  Here's what I would do with $1000.

  • Create a Property Radar account so you can pull lists for direct mail ($50)
  • Buy some Post It notes / drive for dollars and door knock or leave a post it note, also track those addresses to send direct mail  ($50)
  • Create a Podio account to manage your leads and do follow up - Free basic acct?
  • Get a phone number to use off Vumber or elsewhere / don't use personal # (cheap)
  • Buy some bandit signs ($100) - time block and put them out
  • Buy some direct mail supplies: paper, envelopes, stamps $150
  • Spend the rest on direct mail postcards (go for volume)  Check out yellowletters.com or other services to do it for you.  Get it done efficiently and out the door.
  • Spend the monthly cash flow you can afford on more direct mail that you pay someone else to send out.  Don't over think this, just do it consistently
  • Spend your free time door knocking, putting out bandits and sending out direct mail letters your write and mail out yourself
  • Pick 2 or 3 local investment club meet ups and go to them consistently. 
  • Find a successful lease option investor in your local market and network with them so they can teach you that investment strategy as well.

Other Tips:

  • Be yourself.  If you are a nice, genuine person, just speak that way to others and be patient with Sellers.  Don't just scratch the surface in finding out what the Seller's wants & needs & hold backs are.  Go deeper if you can as this will be your road map on how to make an offer they will accept and how to compete against other offers.
  • Hand write and mail out direct mail letters to the driving for dollars or balance of names on your list that you pulled 
  • Learn creative financing strategies from guru's like Joe McCall so you can identify different deal structures and have a solution for every lead type that contacts you.
  • Don't set your expectations low on your wholesaling fees to start.  Find out what the top wholesalers in your market are getting and set your expectations at no less.

Happy Holidays and best wishes for a successful 2016!

9Reply
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52 Replies

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  • Graham McBain
    Investor · Sacramento, Califonia · Member since 2015 · 23 posts · 3 votes
    10y

    @Ben Roberts We're in a similar position. Good job, savings etc... I used to source deals for ARP when I lived in AZ. I've been thinking about doing some farming just like you've said. We should start at the same time and blog about it. It seems like the markets are so different it would be a fun comparison(I'm in Denver).

    1Reply
  • Semyon Rozanovich
    Tarzana, CA · Member since 2015 · 3 posts · 0 votes
    10y

    Hello Ben and food evening.  My name is Sam, I live in Los Angeles area, and intrested in networking with you, since both of us looking into wholesaling is a jump start point. 

    0Reply
  • Semyon Rozanovich
    Tarzana, CA · Member since 2015 · 3 posts · 0 votes
    10y

    good evening. ..lol

    0Reply
  • David Tipton
    Los Angeles, CA · Member since 2015 · 197 posts · 59 votes
    10y
    Originally posted by @Semyon Rozanovich:

    Hello Ben and food evening.  My name is Sam, I live in Los Angeles area, and intrested in networking with you, since both of us looking into wholesaling is a jump start point. 

     You may experience different results and need different strategies in LA.  I wouldn't try fixing and selling pickup trucks here.  Maybe Priuses (Prii?)  Hehe.  

    But seriously, be careful trying to use techniques that work other places in LA.  Lots of competition here.  The wholesaling advice that I heard that makes the most sense is to focus on a very small area and focus your efforts. Good luck!

    0Reply
  • David Tipton
    Los Angeles, CA · Member since 2015 · 197 posts · 59 votes
    10y
    Originally posted by @Graham McBain:

    @Ben Roberts We're in a similar position. Good job, savings etc... I used to source deals for ARP when I lived in AZ. I've been thinking about doing some farming just like you've said. We should start at the same time and blog about it. It seems like the markets are so different it would be a fun comparison(I'm in Denver).

    What a great experiment.  I think lots of people would be interested in seeing the comparison.  

    1Reply
  • Leigh C
    Brooksville, FL · Member since 2012 · 429 posts · 220 votes
    10y

    buy a lawn mower and build up a decent client base...then sell the "business" to roll into real estate.

    0Reply
  • Graham McBain
    Investor · Sacramento, Califonia · Member since 2015 · 23 posts · 3 votes
    10y

    @David Tipton I totally agree! 

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Ben Roberts  @Douglas Skipworth  spend the money on getting your RE licnese in TN. go to work with Douglas's company earn and you learn.. Re is a perfect nights and weekend gig.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    3Reply
  • Douglas SkipworthBusiness Member
    Rental Property Investor · Memphis, TN · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    @Jay Hinrichs,

    Now you're talking!

    @Ben Roberts,

    We can talk about that option on Monday if you want.  It's not for everyone, but it's definitely a great path for some of us.

    Investor's Guide to Memphis Real Estate
    View Page
    0Reply
  • Julie Clark
    Wholesaler & RE Broker · Seattle, WA · Member since 2015 · 42 posts · 34 votes
    10y

    @Ben Roberts  I love your question. It's a good one.  I am a full-time wholesaler in Seattle, WA.  The #1 key to success is volume of leads and your ability to convert them to deals, or none of the other stuff even matters.  Spend some of your up front education time learning how to effectively speak to sellers rather than focus all on the real estate part. Also focus on just getting a deal (lead) and the rest will fall into place.  If you get a good deal, everyone will be here to help & guide you on the next steps.  If you get nervous when you speak to a seller just do the best you can and say you will review with "your investment team" and get back in touch within 24 hours with an offer.  Then throw out your questions to the BP universe and to your local investment club network and you will get answers/help on how to proceed.  Here's what I would do with $1000.

    • Create a Property Radar account so you can pull lists for direct mail ($50)
    • Buy some Post It notes / drive for dollars and door knock or leave a post it note, also track those addresses to send direct mail  ($50)
    • Create a Podio account to manage your leads and do follow up - Free basic acct?
    • Get a phone number to use off Vumber or elsewhere / don't use personal # (cheap)
    • Buy some bandit signs ($100) - time block and put them out
    • Buy some direct mail supplies: paper, envelopes, stamps $150
    • Spend the rest on direct mail postcards (go for volume)  Check out yellowletters.com or other services to do it for you.  Get it done efficiently and out the door.
    • Spend the monthly cash flow you can afford on more direct mail that you pay someone else to send out.  Don't over think this, just do it consistently
    • Spend your free time door knocking, putting out bandits and sending out direct mail letters your write and mail out yourself
    • Pick 2 or 3 local investment club meet ups and go to them consistently. 
    • Find a successful lease option investor in your local market and network with them so they can teach you that investment strategy as well.

    Other Tips:

    • Be yourself.  If you are a nice, genuine person, just speak that way to others and be patient with Sellers.  Don't just scratch the surface in finding out what the Seller's wants & needs & hold backs are.  Go deeper if you can as this will be your road map on how to make an offer they will accept and how to compete against other offers.
    • Hand write and mail out direct mail letters to the driving for dollars or balance of names on your list that you pulled 
    • Learn creative financing strategies from guru's like Joe McCall so you can identify different deal structures and have a solution for every lead type that contacts you.
    • Don't set your expectations low on your wholesaling fees to start.  Find out what the top wholesalers in your market are getting and set your expectations at no less.

    Happy Holidays and best wishes for a successful 2016!

    9Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Julie Clark  Property Radar if your talking about Sean O'tooles fantastic product that every west coast investor should have.. is only on the West coast I don't think they have that in TN.

    You would be surprised how easy we have it on the West coast compared to much of the other markets.. IE we have customer service at title co.. you have a fabulous app like Property radar etc.. most of the folks out east have to rely on what the county gives them on line or do it manually.. there is no customer service at a title co.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    1Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y
    Originally posted by @JD Martin:
    Originally posted by @Ben Roberts:

    @JD Martin, thanks for the advice. I LOVE poker but I'm not sure that gambling is the way to go...  My regular job provides me with a few hundred dollars each month that I can toss towards real estate (which is how I got my current chunk of change). How much capitalization do you think I need to get started wholesaling?

     Ben, not being a wholesaler myself, I can't really say what is an appropriate budget - but I would imagine that, at a minimum, you would have some type of website, a phone number, business cards, and an advertising campaign. If you did direct mail, every 100 pieces will run you about $60, including materials and postage but assuming you do all the rest of the work yourself. I would also assume a purchase of some type of specialized mailing list, as a generic campaign might be a complete waste of time. So I would imagine you might be able to send out maybe 1,000 pieces total. I don't know what the response rate is on things like this, so you would have to take that into account as well. 

    Personally, I think it sounds like a hell of a lot of work with anyone's guess at success rate. Have you spoken to other wholesalers in Memphis? What is their experience & annual income from wholesaling? 

    Finally, I suspect most people get into wholesaling because they don't have any money to do anything else, not because they have any real knowledge that it's a great way to make money in real estate.

    You know, it is a hell of a lot of work.  But so is buying any discounted property, for most people anyway.  If it were me, and it has been, I'd focus on what I could actually buy or get under contract in the next 30-60 days. Then I'd resell it (or assign the contract). No different than looking for a bargain for resale at the flea market or storage auctions or craigslist.  

    I think a lot of newbies make the mistake of focusing on starting a wholesaling business without understanding or knowing if they even like RE.  Or if they have the people or practical skills that are a match for RE.  $1K is enough money to do a small amount of very targeted marketing.  Targeting being the key.  Networking and talking to everyone you know is free.  Driving for dollars is cheap,  Learning to read recorded doc indexes is free.  Lots of way to buy a property and resell it for more.

    0Reply
  • Terry Giancaterino
    Investor · Houston, TX · Member since 2015 · 4 posts · 4 votes
    10y
    Originally posted by @Ben Roberts:

    Background...

    I'm in Memphis Tennessee and I've done a fair amount of research, enough to know that I need to jump in already. I have a little knowledge of my market and a little knowledge of real estate. I have a degree in Finance and a background in Data Analysis, Marketing, and Sales, and I currently work for a REIT.

    Plan...

    I think my best move is get started wholesaling.  I love the marketing, negotiating, and analysis (of both deals and marketing campaigns). I have my personal finances in order ( emergency fund, checking, savings, monthly budget ), and I only have $1000 to get started.  I think my first move is to buy some business cards, setup a website, get a list, and send out postcards (since they appear to be cheaper than yellow letters). I'd like to put half my earnings back in to generating more leads, and half in savings to pay cash for my first rental property.

    Expected outcome?

    The way I figure, I'll learn a lot about my market, as I go.  I'll sell properties to other investors, figuring out who is really killing it and what they're doing.  Watch and learn from them while providing them value.   

    Does this make sense to anybody? What would you do with $1,000?

    Go to VistaPrint.  They have everything you need, including websites you create and they host.  You design your own "FOR SALE" signs and they're cheap! You design your own postcards and they're cheap but don't look cheap. They do door hangers and everything you can think of (and some things that you haven't) for a fair price and the quality is superb.  I am very impressed with my business cards with raised lettering and a photograph.  It all looks very nice and neat.

    1Reply
  • Account Closed
    Professional Auctioneer · Baltimore, MD · Member since 2015 · 1k+ posts · 1k+ votes
    10y
    Originally posted by @Julie Clark:

    @Ben Roberts  I love your question. It's a good one.  I am a full-time wholesaler in Seattle, WA.  The #1 key to success is volume of leads and your ability to convert them to deals, or none of the other stuff even matters.  Spend some of your up front education time learning how to effectively speak to sellers rather than focus all on the real estate part. Also focus on just getting a deal (lead) and the rest will fall into place.  If you get a good deal, everyone will be here to help & guide you on the next steps.  If you get nervous when you speak to a seller just do the best you can and say you will review with "your investment team" and get back in touch within 24 hours with an offer.  Then throw out your questions to the BP universe and to your local investment club network and you will get answers/help on how to proceed.  Here's what I would do with $1000.

    • Create a Property Radar account so you can pull lists for direct mail ($50)
    • Buy some Post It notes / drive for dollars and door knock or leave a post it note, also track those addresses to send direct mail  ($50)
    • Create a Podio account to manage your leads and do follow up - Free basic acct?
    • Get a phone number to use off Vumber or elsewhere / don't use personal # (cheap)
    • Buy some bandit signs ($100) - time block and put them out
    • Buy some direct mail supplies: paper, envelopes, stamps $150
    • Spend the rest on direct mail postcards (go for volume)  Check out yellowletters.com or other services to do it for you.  Get it done efficiently and out the door.
    • Spend the monthly cash flow you can afford on more direct mail that you pay someone else to send out.  Don't over think this, just do it consistently
    • Spend your free time door knocking, putting out bandits and sending out direct mail letters your write and mail out yourself
    • Pick 2 or 3 local investment club meet ups and go to them consistently. 
    • Find a successful lease option investor in your local market and network with them so they can teach you that investment strategy as well.

    Other Tips:

    • Be yourself.  If you are a nice, genuine person, just speak that way to others and be patient with Sellers.  Don't just scratch the surface in finding out what the Seller's wants & needs & hold backs are.  Go deeper if you can as this will be your road map on how to make an offer they will accept and how to compete against other offers.
    • Hand write and mail out direct mail letters to the driving for dollars or balance of names on your list that you pulled 
    • Learn creative financing strategies from guru's like Joe McCall so you can identify different deal structures and have a solution for every lead type that contacts you.
    • Don't set your expectations low on your wholesaling fees to start.  Find out what the top wholesalers in your market are getting and set your expectations at no less.

    Happy Holidays and best wishes for a successful 2016!

     What a wonderful reply.....I love your creativity.

    1Reply
  • Austin Hughes
    Rental Property Investor · Lubbock, TX · Member since 2015 · 462 posts · 184 votes
    10y

    Well, you're in a VERY similar position to myself only a few months ago.

    I had exactly $1,000..working as an intern at a financial services firm in Houston. No real estate deals under my belt, but I had been learning the market I was going to invest in for half a year. Here's what I did, and would do again:

    1. NETWORK... it is free, and it gave me the confidence that I'd be able to wholesale properties once I got them under contract, or find some way to make them productive.

    2. Get Biz Cards for Networking.

    3. Order a $50 list from Listsource.com (the cheapest they will allow.)

    4. Hand-write yellow letters, then get tired, and hire out someone cheap to write a bunch of letters and envelopes.

    5. CRAIGSLIST..you don't really need a website just yet on this first run. I put every kind of angle on REI on craigslist.

    Since you and I are starting with such a small budget, it is important to get QUALITY leads. On my first campaign, I had about 30% of the people call me! It was because I was very personal with the messages, and specific to the type of people I was marketing to.

    Best of luck...and financial analysis! :)

    1Reply
  • Account Closed
    Professional Auctioneer · Baltimore, MD · Member since 2015 · 1k+ posts · 1k+ votes
    10y
    What would you do with $1,000?

    $50.00 goes in to $1,000,  20 times.

    This is 20 opportunities to make 20 offers using a consideration of $50.00.

    I would:

    • Look at 50 houses in your community, FSBO's, Expired Listings and listed proprieties with real estate agents, do not make offers on any! Your goal should be that of educating yourself on the local market, becoming very aware of values.
    • Keep a journal of every property you looked at and the dollar amount per SF and keep copious notes on each.
    • Understand this concept: "If you are not embarrassed with your offer, you are offing too much"
    • Make offers only after you are sure you know values and the local market, and make offers that will make you money.
    • Make offers using some of the follow terms and conditions.
    1. 1. use a study period (to buy times to find an assignee)
    2. 2. subject to home inspection (so you can use second stage negotiations)
    3. 3. Subject to assignment before settlement
    4. 4. Subject to cancellation if an assignee is not found before settlement date
    5. 5. Full profit disclosures; "it is understood that the buyer and sellers have a meeting of the mind and that their goal is to satisfy their financial needs"
    6. 6. Right of possession or access if occupied immediately
    7. 7. Owner financing agreement with assumption without qualification and release of           liability.
    8. 8. Us banking days, not calendar days for settlement.
    9. 9. Take out "Time is of the essence" clause in the agreement
    10. 10. Use a skinny contract of sale (easy to understand by sellers)
    11. 11. Make disclosure that you intend to assign your agreement in order to earn a reasonable profit.
    12. 12. Some of the ideas might grown your $1,000 into a $100,000.00 - "IT DON'T GET NO BETTER THAN THIS!"

    Wishing you good luck.......have fun with your Thousand Bucks!

    Charlie

    3Reply
  • David Veikune
    Investor · Hays, KS · Member since 2014 · 105 posts · 28 votes
    10y

    Great tips. Just keep building that RE nest egg Ben and you'll be fine.

    0Reply
  • Ben Roberts
    OP
    Rental Property Investor · Memphis, TN · Member since 2015 · 203 posts · 135 votes
    10y

    @Julie Clark, @Austin Hughes, @Account Closed Thank you all SO much!  These were exactly the kind of answers I was looking for!

    0Reply
  • Austin Hughes
    Rental Property Investor · Lubbock, TX · Member since 2015 · 462 posts · 184 votes
    10y
    Originally posted by @Ben Roberts:

    @Julie Clark, @Austin Hughes, @Account Closed Thank you all SO much!  These were exactly the kind of answers I was looking for!

     Awesome! Makes me feel good. :)

    0Reply
  • Peter Crisp
    Engineer · Surrey, BC · Member since 2015 · 50 posts · 22 votes
    10y

    There are several good ideas here but I don't see an obvious one. Depending on your current financial and personal situation and the market, I'd consider buying a house with an income suite or a duplex. I'd spend the $1,000 on the inevitable repairs you need. If you are lucky and persistent, you might find one with one side that is in good shape, and another that needs repairs but is liveable. Then, you rent out one side and fix up the other. You will gain valuable experience with renovations, which is helpful if you go the wholesale route, and being a landlord. Then, you can use the cashflow from the income property, and possible forced appreciation (BRRR) to build up a nest-egg. It may not be an either-or thing as you can still try wholesaling or getting your RE license at the same time.

    1Reply
  • Ben Roberts
    OP
    Rental Property Investor · Memphis, TN · Member since 2015 · 203 posts · 135 votes
    10y

    Thanks @Peter Crisp for the suggestion.  I've looked at the duplex / triplex idea a few times but I don't think my family would be too happy with that setup.  It would have been different 5-10 years ago but I cant get away with it right now.  And, there are few duplexes available, especially in the part of town we're shooting for with a personal residence.  I wouldn't be opposed to a duplex for my first buy and hold but I need to get there, first.

    0Reply
  • Lisa B.
    Toronto, Ontario · Member since 2015 · 62 posts · 9 votes
    10y

    These are really great idea. As a newbie, you've opened up my thinking.  I'll go back through this post to take in all of your ideas.  The bottom line is make that $1000 grow as fast as possible but what ever direction you choose, maximize the efficiency of that original amount.

    0Reply
  • Franklin Romine
    Visalia-Fresno, CA · Member since 2009 · 1k+ posts · 863 votes
    10y

    I would spend it all on audio books.

    Frank

    0Reply
  • Ben Roberts
    OP
    Rental Property Investor · Memphis, TN · Member since 2015 · 203 posts · 135 votes
    10y

    @Graham McBain and @Lisa B., 

    I started blogging on BP a couple of days ago.  Personally, I'm terribly afraid of making mistakes but I learn SO much from each one.  I decided to start writing about my experiences not from a "This is what I did and how it worked out" perspective but from a "This is what I screwed up and l what I learned from it" perspective.  My guess is that I'm not the only introvert looking to get started in this business.

    There are a TON of great ideas on this post and I've already started looking at / implementing a few of them.  Being on a limited budget, I'm trying to be as frugal and efficient as possible.  I plan to track the outcome of each idea then write a post about it. Wether or not it worked, what I did, what I should have done / not done, and what I learned from it, trying to be a specific and detailed as possible.  

    I don't  know if it'll help anybody else but I think the perspective that I take will force me to take an honest look at my business and make proper adjustments as I go.  I can't wait to look back 5 or 10 years from now and read about some of my early mistakes and successes.

    1Reply
  • Peter Crisp
    Engineer · Surrey, BC · Member since 2015 · 50 posts · 22 votes
    10y

    Yes some people don't like duplexes or triplexes or basement suites (not sure if you have basements in Memphis but in most areas of Canada including many houses in BC we have basements). They may not appreciate as fast either. We rent out our basement suite and we've had no issues at all, but we a) screened well b) have a legal basement suite with sound insulation and two layers of TypeX drywall. So we rarely hear any noise and they don't hear us either. Security is a big issue, particularly with families, and it's one my wife and I discussed before we decided to rent. I would not rent a room with a family, but a lot of people have had success with AirBnB etc. (we use it, but not for room sharing). For a while, we had a pool table in the space and we weren't renting, but I realized that this pool table would cost us in the 6 figures over 10 years. Every situation is different.

    There's one other idea I have. Depending on what you need for licensing, could spare-time property management be something of interest? There are probably a lot of people who have small properties to manage and if you take on management, you gain experience being a landlord with other people's money. If you do it right (e.g. screen tenants well) it's recurring revenue with not too much time tied up. In this business, people look for honesty first and this costs nothing. You might even stumble across your first deal this way.

    0Reply
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