What to ask the pros in front of you

Question

I hope this is posted in the right place.

This is my position last night:
At my very first REIA meeting, not sure what to expect.  First of all, it's surprising how friendly people are at this meeting.  Several people approached me to introduce themselves, told me how many properties they owned and said that, at my age, I'm doing the best thing possible.

Fast forward a bit.  I have a mission to find a seat as close to the front as possible and I manage to get one at the table right in front of the panel (It was an "ask the expert" night).  Next to me is a gentleman very far along in his investing career that owns SFH all across the States.  Before the meeting starts he asks me where I am in my investing career, advises me that he got to where he is by renting quality homes to quality people, and then the meeting starts.

After the meeting, the same gentleman asks to look over the notes I took!  He went over my notes, line by line, and congratulated me on taking good notes.  His next question was, "what are you going to do when you leave here tonight"?

After speaking with him for a few minutes, another gentleman at the table told me he buys houses, fixes them up and sells to investors looking to rent.  We spoke for 30 minutes about the business.

I gathered more information than I ever imagined (all for only $25!!).

The dilemma is this: both of the gentleman I spoke to asked me if I had any questions.  Investors that are successful, in my area, asking if I have any questions.  I think all newbies can learn from this:  If someone is willing to provide guidance and answer your questions, what do you ask so that you gain the most without wasting their time?

Jeff B. · Answer

After researching your posts I see your strategy is buy and hold with short sales, reos, or foreclosures.

You say you've been educating yourself on this forum but don't specify how we can help you.  We all have our areas of expertise and areas we need advice on and finding your weak areas should be your focus.

I would keep a notepad and write down or type and save them and keep adding to them, research the answer myself or ask these at the next REI meeting.

For someone doing buy and holds you must understand the 50% rule. The 2% rule and what comparable properties are renting for in that area to determine if it will cash flow.  When figuring your expenses consider the vacancy rate, age and condition of the condo or house and it's appliances, HVAC, and plumbing.

It's easy when new to investing to think a property is a great deal for a buy and hold and overlook something that can kill your profits for the next 1 or 2 years. (roof, HVAC, foundation)

What some new investors don't understand is that in some areas of the US the buy and hold strategy works, buy,  rehab and sell works, or just flipping short sales works.  This doesn't mean that each one is going to work in every market that is why the experienced investors will change their focus to other markets and strategies to keep making money.

I would check the local library or purchase a good Landlord legal book and find your states landlord law section of their website.  Nolo has some good landlord books and you might be able to find them in your local library.

Lastly you need to create your system on how you will market, maintain, and manage the property you will be renting.
Collecting or creating the forms and editing them for your needs will help you avoid potential problems later on.

Michael Quarles · Answer

Good to meet you

You have asked an interesting question...

If I were starting all over again I would want to ask things like... "Do they cash the deposit check"?

Seriously, as a guy who understands marketing I would ask myself why would someone who is successful be hanging out at a REIA meeting giving me the time of the day?

If they were the best thing since sliced bread then they wouldn't need you... They would know what and how to create an on purpose business.

However lets say they are just nice guys and are NOT there to take your deals at a large discount...

Probably not but lets assume so.  I would want to know.

1) Who they use for escrow title 
2) average margin 
3) area they invest 
4) are they passive or massive
5) Average days from contract to close to sale to cash
6) deals done 
7) deals done
8) deals done
9) Their real estate attorneys name

Good luck

Michael

Will Barnard · Answer

I certainly can not speak for you, but from my perspective, there are many people who give education back and enjoy the atmosphere and networking at both RE club meetings and right here on BP. I personally enjoy educating others at my RE club meetings and do so without a paycheck for it.

Curt Davis · Answer

Well, many great replies.  Here is one I am going to throw out.  In my local area we have two investment clubs.  One is focused on education and the other is focused on selling you  property.  You see, I am going to step out on a limb here and say that at most REIA's there are more people selling homes there and when a new person shows up all they care about is getting to them first and giving a good pitch about them and their property.

Also, many new investors do not have the skill and nohow to find, negotiate, hire a contractor, manage the rehab, rent out the home.  This will come with experience.  I agree that if you can take out experienced investors to lunch or get a beer to pick their brain that is time well spent.

I usually suggest that before a new investor tries to do things on their own that they buy a few homes from a well known wholesale investor, find someone who will not take you for a ride.  The main reasons I suggest this is because #1, you will want to build your own portfolio of homes and get experience this way and #2, I personally would not want to buy homes from anyone who did not own any themselves.

Good luck, keep going to your local REIA

Bill Gulley · Answer

Hi, all great questions! If I were starting out what I would ask is:

WHen you find a property for sale how do you identify the best strategy to apply to a given situation? How to recognize a deal is the very first step, IMO. You might find a property that is offered below what market value might be, but if you don't know what to do with it and you buy it, it may not turn out to be a great deal after all. Know how to unload them before you buy them. I have always worked my deals backwards so to speak, what my likley end result was going to be and working the deal backwards to the offer, but with obvious considerations taken into consideration as pointed out above. It's just a risk assessment thing. Bill

Michael Quarles · Answer

Great point...

I go to the darn things too. The last time I went to a REIA meeting I was the guy on stage speaking for friggin 2 hours...

So your point is well taken...

Brian Haskins · Answer

Well if they are nice enough to do that then most likely they will answer any questions you have. I would say figure out what you plan to do first and then gather as much info as you can via the web and then ask specific questions to fill in the blanks so hopefully you can get started pretty quickly.

Brian Haskins

Chris R. · Answer

Thank you all for your responses!  My list of questions grows every day and I have certainly been reading every chance that I have.

Rather than continuing to ask questions in this thread, I'll be starting new threads for each question that comes up (If I can't find the answer on my own first).

If anyone is in the Louisville area, I'm buying lunch and/or beers if you'd be willing to sit down with me.

Thanks again, I'm sure you'll be hearing more from me as I get this ball rolling!

Chris

Matt Eilers · Answer

If they are willing to share, I would ask
1) what local areas do you like best and why?
2) do you have any preferred lendors that you use
3) preferred agents
4) (if your looking to buy and hold via renting) what ways do you find successful to get quality tenants
5) any recommend contractors who do quality work at a good price (in case you need a painter, general handyman, electrician, 
6) and then I would ask for their number and if I might call them if I had further questions when you are actually in the midst of a deal.
Best of luck.
Matt

What to ask the pros in front of you

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