Upcoming Investor from Abingdon, Maryland

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Upcoming Investor from Abingdon, Maryland

William Rose
Real Estate Broker · Abingdon, MD · Member since 2014 · 28 posts · 5 votes

Hello everyone!

      My name is William Rose and I'm an 18 year old entrepreneur. Ever since I was in middle school I've been the kid trying to establish a business in one way or another, whether it was selling gums to classmates or building up a lawn care business. These small businesses provided a good amount of cash-flow and kept me satisfied in my earlier years. In my senior year of High School I decided to start up an Ebay business. I did a few hours of research and managed to start selling Iphone chargers. The first few days were slow and then the cash wouldn't stop coming in. I did about $1500 in a month (Which was a very big deal for me) before getting ran out of business due to Apple's iOS 7. I still have the chargers sitting in my room. 

      After my catastrophic failure I began searching for new investment opportunities. I listened to audio books and tried to soak up as much knowledge as I possibly could. I discovered a few great opportunities but my lack of funds stopped me from pursuing them. In response, I picked up a sales job at a major retail chain this Summer and I've been saving since. I also enrolled myself into a local community college's business program. Using a combination of my extra financial aid funds and my job savings, I decided to take action on Real Estate Investing since it seemed like such a great opportunity.

             I've set these goals to accomplish over the next 6-months

  • Make $10,000 from Wholesaling
  • Create $1,000 in monthly passive income using Owner Financing, Lease Options & Subject To's

             In order to accomplish these goals I've come up with this strategy

  • Send out 500 Yellow Letters to targets and put 25 bandit signs out (Bi-Weekly)   

        I have my 500 Yellow Letters ready to be sent out and my bandit signs are ready to be placed. I had to fill in the names and addresses of the recipients on my letters so it was quite a bit of work but I'm hoping it'll be worth it and if not I'm more than willing to keep investing. I'm willing to do anything to accomplish my goals. I've saved up $600 and by next month I'll have around $2,000 to invest. That doesn't count my parent's money, who've said that they're willing to help since they believe in me and have seen some of the results from my previous ventures.

                                              The questions that I have are

  • What Yellow Letter marketing strategies should I use in order to accomplish my goals in the 6- month time frame? I know some investors send multiple letters to the same recipients so I was wondering if I should take that route or not.
  • If you were starting out with $2,000 to invest, what moves would you make in order to accomplish my goals in 6-months.

      If anyone feels as if they can give me any guidance it would really really be greatly appreciated. I'll try my best to return the favor. I'm just trying to take control of my life and manifest my dreams before I end up working 8-hours a day at an average job asking myself "How'd I get here?". Once again, ANY advice is appreciated. 

Thanks.

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  • Elizabeth Colegrove
    Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
    11y

    Welcome to Biggerpockets!

    You found the place to be! You will find no better place to build a solid platform than bigger pockets. The one thing we all agree up on is that we invest in real estate. Beyond that everyone has a different niche! You have a fantastic plan! Just stick with it and be flexible. We have a goal (early retirement) and we haven't deviated from the end goal while our "internal" goal has not stayed the same :)

    We got started as buy and hold investors at 23 with our first primary property. We fixed it up and than rented it out when my husband was transferred. I talk about our strategy and getting started with no money down in podcast 103 :) Over time we developed our strategy and build an "always evolving plan" towards our goal, of early retirement off the cash flow in 15 years.

    We are buy and hold investors who invest in class A properties self-managing from a distance while working full time. So we do work on furthering our careers. We live very frugally allowing us to live off of one income and save the other. We have further our career and used the W2 income to leverage our real estate portfolio.

    I highly recommend you also check out- the blogs, forums and listen to the podcasts. If you see a post you enjoy check out the persons signature. As many of us have created resources around our niche (websites, blogs, etc) so checking out the signature is a great to get more information. Make sure you don't miss out on networking is by filling out your signature, profile and pming people with questions.

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  • Mark Gagner
    Residential Real Estate Broker · Campbell, CA · Member since 2013 · 38 posts · 29 votes
    11y

    William,

    I admire your ambition and success at such a young age.  Your persistence and tenacity will take you far in life.  

    I have a few comments and suggestions:

    1. Before investing money to get your telephone ringing with motivated sellers, you need to make sure you know how to analyze a deal and determine the maximum price you will offer a seller. The general formula (where I am from in N CA) is Maximum Offer = 75% x ARV (after repair value) - construction cost. Determining the ARV and construction budget will take some experience and/or a partner that can help you out. If this is all new to you, I suggest joining your local real estate investors association (REIA) and networking with fix and flip investors. I assure you it will not be hard to find people willing to help you out IF you show them you have a credible plan to find motivated sellers.

    2.  You need to have a purchase contract to get the property "locked up".  Other fix and flip investors you meet should be able to help OR try calling a few real estate agents until you find one that will help.  Promise them that you will give them "retail" listing leads if your wholesale deal doesn't work out and I am sure you will find an agent that is willing to help. 

    3. You need to create a buyers list ASAP, so that when you get a property in contract you will have people to wholesale the property to. You meet people to put on your buyers list by networking at your local REIA (see above), joining local real estate meetups (www.meetup.com), calling bandit sign numbers, searching Craigslist, and calling real estate agents that specialize in REOs, short sales and distressed properties. Always be adding to your list with every potential cash buyer or buy/hold investor you meet.

    4. Bandit signs are a great idea and work well in most markets.  Place them in areas where homes are selling relatively fast and at lower price points.  Place them at major intersections for maximum visibility, BUT spread them out adequately so that you do not attract code enforcement officials that can tell you to remove the signs or face stiff fines.

    5.  Yellow letters generally work in most markets, but some like my "hot" market in N CA requires substantial ongoing investment to be successful.  The gurus and direct mail experts will all tell you that you have to "touch" the same people at least 3 times, and it can take as many as 7x for a motivated seller to respond.  IF you can afford to send 1000 letters only, it is better to send 250 letters 4x to the same list than to send 1000 letters to different people.  As far as content or packaging of your letter, anything you can do to stand apart from other direct mail people will help your response.  Just make it appear personal.  It will vary depending on the lists you use, but in general, you should space out the touches every 4-6 weeks

    That is probably a lot to digest for now.  The most important thing is to take action (which it sounds like you have no problem doing).  Meet as many people in the business as you can, listen to the relative podcasts from sites like Bigger Pockets and others (just Google real estate podcasts) and read blogs and books.  There is no shortage of information on the subjects that you need help and most RE investors are generous with their time and advice. Best of luck!!!!

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  • William Rose
    OP
    Real Estate Broker · Abingdon, MD · Member since 2014 · 28 posts · 5 votes
    11y
    Originally posted by @Mark Gagner:

    William,

    I admire your ambition and success at such a young age.  Your persistence and tenacity will take you far in life.  

    I have a few comments and suggestions:

    1. Before investing money to get your telephone ringing with motivated sellers, you need to make sure you know how to analyze a deal and determine the maximum price you will offer a seller. The general formula (where I am from in N CA) is Maximum Offer = 75% x ARV (after repair value) - construction cost. Determining the ARV and construction budget will take some experience and/or a partner that can help you out. If this is all new to you, I suggest joining your local real estate investors association (REIA) and networking with fix and flip investors. I assure you it will not be hard to find people willing to help you out IF you show them you have a credible plan to find motivated sellers.

    2.  You need to have a purchase contract to get the property "locked up".  Other fix and flip investors you meet should be able to help OR try calling a few real estate agents until you find one that will help.  Promise them that you will give them "retail" listing leads if your wholesale deal doesn't work out and I am sure you will find an agent that is willing to help. 

    3. You need to create a buyers list ASAP, so that when you get a property in contract you will have people to wholesale the property to. You meet people to put on your buyers list by networking at your local REIA (see above), joining local real estate meetups (www.meetup.com), calling bandit sign numbers, searching Craigslist, and calling real estate agents that specialize in REOs, short sales and distressed properties. Always be adding to your list with every potential cash buyer or buy/hold investor you meet.

    4. Bandit signs are a great idea and work well in most markets.  Place them in areas where homes are selling relatively fast and at lower price points.  Place them at major intersections for maximum visibility, BUT spread them out adequately so that you do not attract code enforcement officials that can tell you to remove the signs or face stiff fines.

    5.  Yellow letters generally work in most markets, but some like my "hot" market in N CA requires substantial ongoing investment to be successful.  The gurus and direct mail experts will all tell you that you have to "touch" the same people at least 3 times, and it can take as many as 7x for a motivated seller to respond.  IF you can afford to send 1000 letters only, it is better to send 250 letters 4x to the same list than to send 1000 letters to different people.  As far as content or packaging of your letter, anything you can do to stand apart from other direct mail people will help your response.  Just make it appear personal.  It will vary depending on the lists you use, but in general, you should space out the touches every 4-6 weeks

    That is probably a lot to digest for now.  The most important thing is to take action (which it sounds like you have no problem doing).  Meet as many people in the business as you can, listen to the relative podcasts from sites like Bigger Pockets and others (just Google real estate podcasts) and read blogs and books.  There is no shortage of information on the subjects that you need help and most RE investors are generous with their time and advice. Best of luck!!!!

     Thank You!

    I've actually done a lot of ARV research and I'm lucky enough to have Redfin in my area so I should be good. One of my Dad's personal friends also happens to be a contractor so I plan on getting him out to do a quick appraisal of the properties that I acquire. Definitely want to go check out my local REIA meeting though to network with some potential business partners.

    I have my one page Purchase and Sale Agreement ready to go along with my assignment contract. 

    A few weeks ago I put up a golden ghost ad up Craigslist and I got about 15 people on my list begging for deals so I've made a bit of progress. Also got my title company in place.

    Still need to pinpoint my exact areas for my bandit signs. And thanks a lot for clearing up the Yellow letters thing for me. My natural tendency was to of course send out as many letters to as many people as possible but I'll change that up in order to help build a relationship with the potential seller.

    Thanks for your advice!

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  • Mark Gagner
    Residential Real Estate Broker · Campbell, CA · Member since 2013 · 38 posts · 29 votes
    11y

    You sound like you are well on your way to becoming a successful wholesaler.  The key is to get your 1st deal done and then your confidence will soar.  Every deal you do, you will likely learn something new, but it only takes a few of them to begin feeling like a pro.  As a fix/flipper my most valued relationships are with people that can find me deals.  If you are good at it, you will be a rock star in the local RE community.  Best of luck!

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  • William Rose
    OP
    Real Estate Broker · Abingdon, MD · Member since 2014 · 28 posts · 5 votes
    11y
    Originally posted by @Mark Gagner:

    You sound like you are well on your way to becoming a successful wholesaler.  The key is to get your 1st deal done and then your confidence will soar.  Every deal you do, you will likely learn something new, but it only takes a few of them to begin feeling like a pro.  As a fix/flipper my most valued relationships are with people that can find me deals.  If you are good at it, you will be a rock star in the local RE community.  Best of luck!

     Thanks again Mark. Are you familiar with some of the marketing techniques used to find owners willing to do Owner Financing or Lease Options? Just want to acquire a few properties and get some tenants in for the passive income.

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  • Mark Gagner
    Residential Real Estate Broker · Campbell, CA · Member since 2013 · 38 posts · 29 votes
    11y

    Frankly, I haven't done either, so I am probably not the best person to ask.  With that said, finding these opportunities is just like trying to find any other distressed property situation, where you are looking to help an owner sell their property easily and fast.  For the most part, I don't think the strategy to find these opportunities are any different from the ones you are already using.  The difference is that some motivated sellers may want the passive income themselves AND avoid a capital gains hit by doing seller financing.  The cool thing is that understanding these strategies gives you a bigger arsenal to help a distressed seller out.  Not only can you offer to buy for cash, you can also ask them if they would prefer the passive income while potentially avoiding capital gains taxes.  By having multiple options to offer any seller, you become a more valuable resource to them.  I hope that helps!

    Mark

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