100k to Invest, Need Advice

19 Replies

Hi everyone,

I've been a lurker here for a while, read a bunch, listened to podcasts, did all I can do on paper. Now I need to take action and my first attempt at that failed. I thought I had found a nice contractor company to invest in some flips, but guy never came through with showing me his portfolio. A lot of talk for a couple of weeks and nothing. So now I'm feeling a little less optimistic.

I'd like to invest 50-100k in the Indianapolis and surrounding burbs market. Ideally, I'd find somebody who does that for a living, has a bunch of knowledge and is willing to let me tag along with him and soak up all I can, while trying to not be a pain in the ***. 

How do I go about finding those companies? Also, I've tried to find a dedicated guide to first-time money investors (what are the usual terms in the industry when it comes to interest rate, loan time, what docs I need, etc) but I can't find one. There are a lot of REI guides but those are mostly written from the point of view of people seeking for loans rather than making them. Any ideas are appreciated. Also, sorry for the long post.

Alex

@Alexandra Gortchilova Hi and welcome to BiggerPockets! It’s a great place to learn more about investing and meet the people you want to meet. If you haven't yet, be sure to check out the The Ultimate Beginner's Guide to Real Estate Investing and don't forget to set up your Keyword Alerts!

@Ian Ippolito I am not accredited. I don't know much about crowdfunding in the real estate business but I'll look into it. The idea of working with a local company, at least in the beginning, appeals more to me though, as I can learn about the business rather than just passively invest.

Alexandra Gortchilova

Hello an Welcome If Your Ready to learn i would suggest getting out to some local Real Estate Clubs/Meetups in Indianapolis an rubbing Elbows with a few People Networking an Building Relations with a few.

Merry Christmas.

@Alexandra Gortchilova Welcome to BP!

Some genereal advice is: be very careful with who you tell about having money to invest. I would keep it to myself for now and spend the time scouting the terrain. Consider many options before making your final choice. 

Best of luck.

TOTALLY agreeing with @Ingrid J. . I would approach any meetings as "being there to learn" and when you find someone you feel is a good fit, then you can share your position. There are WAY too many people looking for people like you and not all of them will be qualified to work with you. If you sit through enough of the CIREIA meetings that are only available to paying members of your club, you'll start to get a good feel for who is knowledgable and experienced vs. who is full of hot air and pipe dreams. I don't bother with my REIA meetings that are open to non-paying people because it's literally a bunch of people with no experience looking for YOU. Seriously. They can occasionally be like a meat market.

No matter what, always reach out here to help check the numbers and the details.  Use the tools.  Read up on all of it.  And I wouldn't put all of your potential investment money into your first deal "just in case".

@Alexandra Gortchilova  agree with the not telling people you have money yet. Look on Meetup.com or the app.  There is also the INREIA meetings held on the 2nd Tuesday of every month. And an unofficial BP meeting towards the end of month.

What are you interested in?  Flipping? Loaning?  Buy and hold? Notes? Liens?

@Alexandra Gortchilova   one thing you may consider is to hook up with a premier hard money lender in your market.. he or she will have a stable of mostly successful flippers already as clients.. then you just shadow the broker putting you into the deals. the broker will share or should share the due diligence with you.. you can drive by look at the property to decide if you want to fund it.. you can go there and watch it being done.. poke around ask questions.. The hard money lender will also be doing the paper work etc. so you just shadow that as well.

recommend that you fund 100% of the deal and avoid for your first time a co Beneficiary transaction.. ( which is basically what crowd funding is  IE bringing a bunch of small investors into one loan)...

Now some HML will have a fund set up.. but that will not give you the same experience as funding the deal yourself as you would just invest in their fund and be in multiple deals. Just like crowd funding basically

AND beware solicitations from anyone on BP.. BP in of itself is does not make a potential partner a good choice there are a lot of scammers that are hitting this site lately and there are a lot of newbies and you don't really want to go thorugh their learning curve whne you yourself are in the learning stage.

@Heather DeGeorge   Sound advice and for that reason I have only attended two RIA meetings in the last 20 plus years.  In Portland we have a local meetup that cost money its called Rare bird... now the guys running it are in the business and they are smart they charge but they also bring in good content ( I know they had me as a guest speaker :)  ))

But even better is they get spoon fed deals with all the folks that are members .. And your absolutely correct just charging a few bucks 200 to 300 a year will winnow out the total time wasters dreamers etc..   And of course much can be said about this exact thing on BP anyone with a computer can be on here for free.. so you have no clue to understand who or what they are... I got a 15k lesson in that one this last year and two other BP members got even more expensive lessons with this one frequent BP poster  :)  I can laugh because 15k is not going to change my life.. but other investors this could be serious

Its why I am in the 1% of  BP frequent posters ( and it could be far less than 1%) that think that paid training is one of the best ways to actually get going in this business as opposed to thinking you can listen to a few pod cast read a few blogs read BP until your eyes bug out and your all of a sudden going to be a successful RE investor...

Those that do succeed with this method in my mind are already successful at what they do for a living.. they already have good credit have cash to invest understand basic business etc. 

@Jay Hinrichs Hey, I just got on BP. How do I get a schedule and pricing for those classes your talking about? I live in the Milwaukie area, and I would love to attend them. 

@Shane Short Google Rare Bird  they have monthly meetings.  and they are on BP infrequently.. they are good guys very knowledgeable ( I believe their background comes from being licensed Appraisers).  Plus they are Smart  they have all these folks that come meet ups and you can bet they get deals dropped in their lap.. But they earn it.. they took the massive action to run the thing etc..

Good luck... PDX is competitive as all heck ... but I guess great markets are like that.

YOu can always hit me up if you have a deal as well if for some reason you get stuck

Agreed @Jay Hinrichs --the REIA meetings can be duds depending on where you are. When we were in NJ, it was a great group--lots of great speakers that gave you information instead of selling. Here in Chicagoland we haven't been able to make it to enough meetings to tell. And the meetup groups are often people selling mentoring services or some other kind of "education".

It's a jungle out there; and people with money to invest are often the prey.  :/

@Heather DeGeorge   Agreed on all fronts.

I am somewhat conflicted on it all.. I have clients that I fund deals to that give all the credit and success to the Guru's they paid to mentor them many of them spending over 100k .

But now they are making that a quarter... so who am I to argue.. with that route as well.

At the end of the day I think its just simple math and the law of averages.. no matter what route you use to get there..

I think with no prior experience No money no credit etc the amount of folks that actually make it in this business I would be surprised if its as high as 10%..

Just like when I owned RE brokerages 50% washed out in 1 to 2 years.. 20% of agents brought in 80% of the revenue to the company. and you always had your one two or three that were knocking down 500k or more in commissions..

So its only with the interenet age do we now take our great industry and open it up to the mass's  and you get what you get

Thank you all for the great suggestions. I knew I was gambling when I mentioned money but I've seen plenty of posts asking for advice and only receiving welcoming messages with no substance so I wanted to get some response, even if it was just fishing. 

I'll be way more careful from now on. I feel like I'm stuck in the land of indecision. I've been reading for a couple of years and juts when I thought I was going jump, the guy turned out to be a flake and now I'm back to 0. Maybe meetings in person are going to give me the boost I need. 

Alexandra: Regarding crowd funding, the feds are expected to soon issue regulations that will open crowd funding up to people who are not accredited investors. After investing in multiple crowd funding deals, I've moved on to doing my own HM lending. Whenever I have asked, I have received the underwriting/DD documents from the crowd funding firm. I've found that info to be a great tool to learn to analyze deals. Crowd funding is also a way to find out what the crowd funding firms are getting from developers.