It's time!!!!!! We are investors!

22 Replies

We did it. My wife and I finally agreed, the time is now. I liquefied 25K in funds, and we are now, ACTIVELY in the market for our first investment. I'M SO EXCITED!

Also, I can't breathe. LOL.

We're looking for a BRRRR in Atlanta, or a multi-family in Georgia. I think we'd both prefer a BRRRR, but that takes us into hard money lending, which is a bit of a scary unknown for us both. I'm reaching out now to find lenders, but I feel like I'm at DEFCON 4 watching out for potential scams.

I don't feel like this first deal will make or break us for the future. We understand that we will make mistakes, and I especially understand that those mistakes probably won't lead to significant profit at first. We're committed to staying the course.

Finding the deal is the trick, and I haven't even gotten to the part of bidding and winning the sale, which I'm reading is a chore. I searched for hours the other day to only find one property (I thought) would be a good BRRRR candidate, and it was gone before I had a chance to show my wife.

This step, I see being a problem for us at the beginning. Not being aggressive enough. Having to discuss each lead, and being too detail oriented. I mean if it takes 30 offers to get the first property, man my wife and I are gonna end up with a couple more kids if we're going to be interacting this much, sheesh.

What are the masses finding with the buy and hold properties? Are your winning bids coming in high, at asking, low? I hate to leave money on the table as much as I hate wasting my time. If a house is going for 80K, this is what keeps me up at night. Offer 50K? Offer 90K? Or, more than likely, its some lesser variation dependent on an "all the fish in the sea" list of "If/then" scenarios. 

I guess I don't really have a question for group today. Just writing to unburden my soul. We're here though, it's time.  

Welcome to REI and the land of opportunity. First thing I would no is enter keyword Atlanta - Marietta etc and narrow your search for meet ups / meetings/ networking .
Second buy the book “ richest man in Babylon“ by George S Clason. Great read on financial fundamentals all around and reminder of the same principles apply in real estate. Specifically there is a story of a man who has an opportunity and not take advantage and loses great income potential.
Finally get yourself a good realtor who specializes in your price point location etc. Do not be intimidated there’s a lot on here in your area help with your first purchase and beyond. Best wishes
Chris

I know this is a big thing for you. A useful saying about real estate goes like this: "Sell at the wedding. Buy at the funeral." This saying has multiple meanings. First of all, when the economy's moving along nicely, good deals are not easy to find. It's when the financial commentators are doing their best to find a gold egg in a steaming heap of awful news that the good deals come along. General human misery =  great time to buy. But everybody knows this after their first day studying real estate.

The saying is also, quite literally, about weddings and funerals. Some of the best customers to have are newlywed couples flush with cash looking for their first home. Those people know very little and will buy anything that strikes their fancy. One of the best times to find great deals to buy is when there's a death. No one wants to go through Grandma's musty piles of sentimental crap -- the kids just want to get rid of the place and split the proceeds. When people who aren't in the business  want to get rid of real estate quickly in any way, in fact, there's always this cheap sentimentality that tags along. That's where you look for the good deals. Specific human misery = great deals.

The MLS isn't going to get you where you want to be. You need to look at probate leads, divorces, bankruptcies, code violations, high medical expenses, foreclosures, old landlords selling old rentals in bad shape, kids in deep legal trouble, in short, try to unearth off-market deals.

Congratulations on thinking about considering the possibility of maybe taking the leap if things line up perfectly and you act quickly and...well, you get the point. ;)

Seriously, don't over-think it. Figure out what the numbers need to look to be successful and then stick to them. You don't have to hit a home run. You don't have to get a 72%, 37% or even 14% return. The higher the returns, the more work and risk involved. Instead, find something that is relatively safe and can demonstrate success. This will bolster your confidence for the next deal and you will eventually gain the experience necessary to take bigger risks and seek better returns.

I know investors from the 80's and 90's that bought investment property all cash, full asking price. They didn't stay up on the market and their rents are low. They never learned to screen tenants and had some bad ones. There are dozens of things they did that do not fit the current investor wisdom...yet they are still successful. 

My first investment was a mediocre townhome bought sight unseen. I didn't even have pictures to look at but based my decision on my father-in-law who was a REALTOR. I bought it at $67,000 with 3% down but ended up spending another $10,000 in the first three months because of a major sewer problem and an HOA assessment my father-in-law/REALTOR failed to tell me about. After the first three months, I never put another dime of my own money into it and I sold it eight years later and cashed out almost $70,000.

Real estate can be very forgiving if you are patient. Don't wait for the perfect deal before jumping in or you may never get there.

I appreciate the encouragement gentlemen, thank you. This process, is empowering, and exciting. I greatly enjoy the adventure and for the first time, real hope.

Account Closed Congrats on taking the first step! That first deal is scary for sure but it gets less scary as you do more deals :) Are you looking to stay in your local market (Paulding)? My company does a good number of deals in Paulding. I have a flip going in Dallas currently. Are you exclusively looking on the MLS? As mentioned above, it will be tougher to find deals that make sense, but it's not impossible, depending on your criteria. My husband is an agent (investing purposes only, not his full-time gig). He would be happy to set you up with an FMLS search. Feel free to reach out with questions. I'm not all that far (time/experience wise and geographically ) from where you are :)

Start going to ALL the local meet ups within 45 min drive of you. Meet wholesalers. Find the ones that are marketing but are not super experienced. They are a good bet for these props you speak of. The more experienced ones will want a fast close, usually all cash, and non-refundable earnest money.

Account Closed It is an exciting time! I personally love the ATL market and typically try to focus in northern parts of the city, although there are some great deals in the south - College park area. I think if you go south you need to know the market on a more granular level. Personally, when I attack ATL, I focus purely on off-market assets. I also find that old fashion mailers/door knocking works for certain neighborhoods.

I am currently targeting some assets in Gwinnett County since there are a few newer neighborhoods that have the "planned" community with anchor stores (grocers and shopping) already signed to be within the community. I find that in ATL market those work best but do tend to be pricey. 

As for leveraging - if you can use someone else's money do it. You should try and keep as much cash/liquid as you can and leverage as long as the numbers make sense. Full disclosure; I have been a direct lender for quite some time so I am aware of how to best use it. Happy to discuss further or make any recommendation should you want them. Feel free to PM/email/call. 

Good luck and make sure you have fun doing it! 

Look for creative ways to find off market deals (drive for dollars, mailings, cold calls, etc) and bring CASH. At the minimum get pre-approved (for x $$) through your lender to streamline the negotiation process. 

I'm in the same camp because I don't have enough for an all cash offer. 

@Account Closed I believe I recently saw another thread about a completed brrr in Atlanta. It’s possible if you know what you’re doing but beyond that I wouldn’t overthink it.

Here’s some basic criteria I use:

CoC return of 8-10 percent or more

Rent ratio of 1 percent at minimum ideally closer to 1.5 percent.

B neighborhood. Rents 750 or more, ideally 800 or more.

Originally posted by Account Closed:

Are your winning bids coming in high, at asking, low? If a house is going for 80K, Offer 50K? Offer 90K?

The house shouldn't be 'going for' anything, except as evidenced by the high grass or peeling paint or distressed story. Off-market like Jim suggests. Getting in back of the MLS bidding line isnt how most of us do it anymore. Maybe search for long DOMs and investigate those further if you want to go the MLS route.

When you do offer, know comps and rents and repair estimates and don't offer with a bunch of zeroes.  Use very specific amounts to at least appear like it came from your calculator and is your highest and best.  Zeroes are the balloons of the uninformed, floating up to be countered back or shot down. Good luck!

Yes, not looking to occupy. Great advice everyone. I'm slowly reaching out to everyone who has offered advice...there's a lot to process. I'm happy to see I wasn't too far off on the strategy. I'm actually looking at Cash on Cash of the rental as my primary driver, the BRRRR part is a secondary concern (although genuine). I do expect once the unit is stabilized with a tenant I'll be in the market for a property manager once I get more than three properties.

Without getting completely crushed by CAP Gains, BRRRR seems like a decent way to increase the liquid capital. I'm attracted by the glamour of a quick flip pay out which I know is pure fantasy. Constant reminders to self that the goal is long term sustainable income.

Originally posted by @Aaron Smith :

@Aninze A.

Yes, you would, its an owner occupied loan. Beats hard money though.

 use fannie mae homestyle loan instead - it's open to investors for 1-unit properties:

https://www.fanniemae.com/content/fact_sheet/homes...

i've read mixed reviews on closing times (upwards of 60 days) and not all lenders being familiar with this product, but it does look good on paper.

Hello David and Company!

I am a newbie here on BP, not quite sure how to best approach building relationships and avoid being a nuisance.

To share a bit about myself, I recently started as a loan officer with Sherman Bridge after spending about 2 years in loan compliance so I'm extremely excited and enthused about being in this space now.  Before stepping into this industry, I worked in Hospitality for well over a decade as a managing partner in a bar which my partners and I chose to sell in 2014 which ended a 3-year run. The decision wasn't tough, my heart simply wasn't there anymore.

I still remember very well what I learned about myself and people and what types of intangibles are invaluable when aiming to establish lifelong relationships. In addition to the degree of pure effort it took to establish and build the lasting relationships that will always remain with me, my goal in with this position is simply to carry myself with a "beginners mind," treat others as I would like to be treated and try to be the best version of myself every day.

My purpose as a loan officer will be to provide, to the best of my ability, truth and understanding about all things from hard money lending to life and always encourage that we do two things:

1) invest time in thought and planning.

2) strive to perpetually learn and ask questions in order to make the best decisions.

The greatest values in my life are the interactions and relationships I have with my family, friends, and people; without, I am truly void of purpose and inspiration, so I am truly always available 24/7 to listen or to discuss anything under the sun.

Where there is opportunity, there is contagious spirit and optimism; it's a thrill when people share their visions and ideas with me so I'm always here to listen and bounce ideas around.

The only topic I'd really like to touch upon at this time is:  Yes, we would need to evaluate credit and there will be a need for cash and assets to lend.  Avoid the 'Perfect Situation' people, it is indeed too good to be true.

Best regards,

Daniel Vo

Sherman Bridge Lending

Congratulations Account Closed says, create your great deal!

I have been listening to the podcasts and also just finished reading the Long Distance Real Estate Investing by @David Greene . I am also from the Bay Area and still determining what state I would invest in. Keep us posted! 

Hi Account Closed,  I'm a newbie here myself.  I am looking to buy my first property in the next month or two.  Part of me is nervous (best to be if you want to be careful with your money!), but the rest of me is determined to study hard then PULL THE TRIGGER.  Fake it till you make it.  Here's some things that have helped me.  

I asked for recommendations for hard money people on he boards here and got (easily) pre-approved with LendingHome. I don't know that I will be using hard money yet, but it's good to have it lined up. I had problems with the others that were recommended to me because I don't have an LLC. I also got pre-approved for a conventional loan so that when I submit offers I have a letter to attach to the offer. I used the guy my realtor suggested. Make sure it is a lender that is accustomed to working with an investor.

I also made a list of all the possible ways to look for deals and what I know about each.  There's a good webinar about how to find off-market deals in the pro-replay room that formed the basis of the list, so go look for it, then add to it as you learn of more.  I plan on learning about each on in detail over the coming weeks to decide which will work best for me.

You definitely need a good realtor with experience investing him/herself to help you with this process. So if you don't have one, get one! They are the ones to trust on negotiating price. Pay them to do it so you don't have to, and you'll feel less nervous about leaving money on the table. I am finding deals on the MLS but they are definitely few and far between. But as I haven't offered on any yet, I can't speak to that part. I can see using long DOM or expired listings as a valid way to use the MLS effectively to get a good deal.

I think you and your wife need to agree what criteria and farm area works for you, and then make offers.  If you can very specifically agree on what works and what does not, and put it in writing, it might eliminate some of the nail biting you seem to be experiencing already.  

Lastly, I've heard that the biggest thing is just to jump in when you find a good deal, and don't wait any longer.  

Hope that helps some.  Good luck!