Hello Everyone, What are the crucial steps I need to take?

Question

Hello Everyone,

This is my first post on BiggerPockets. I am a Real Estate Investor in the Austin, Texas area. I started learning about Real Estate Investing around July of 2015. I am currently working Full-Time and investing part time. In this year, I started an LLC, have been marketing through bandit signs, direct mail, and door knocking. I am still looking for my first deal to put into my portfolio. My goal is to have at least 2 house under my name by the end of 2016. I have learned a lot in the past year through reading all the books from Bigger Pockets, listening to Podcasts, going to investor Meetups, and building my systems. I understand I am in a very hot market and people are buying at above market prices, which I do not want to do, and could not afford to do even if I wanted to.

From what you can understand about my situation, what do you think are the most important steps I can take in my goal of purchasing 2 properties this year? I know I will probably have to creatively finance my deals since I do not have the funds to do a 20% down on houses in this area which are $175k+ ARV. What should I be doing daily to create constant progress towards this goal? I always try to evaluate myself and my progress but having an outside opinion is very valuable. Thank you for taking the time to read this post.

Jay Harding · Answer

Paul, first allow me to admit that I'm not really qualified to comment since I have yet to do a deal myself, however I do have an appointment tomorrow afternoon to sign my first purchase agreement, hopefully everything goes as planned.

I've been studying the business for six months with a mentor and on my own. The Portland Oregon market is extremely hot and competitive right now, a lot like where your at it sounds. All I can tell you is what I did. I looked at a vast array of the direct mail pieces that other investors here are mailing and designed my fist mailer using a completely different approach, it dropped to 1,300 homes two weeks ago and I received 4 positive responses, two of them including the deal I am signing tomorrow said to me we get 5 or 6 of these things a week, but your letter was "DIFFERENT". Thus I encourage you to analyze the competition and try using an opposite approach, however I am smart enough to know that this is not the only way, those bigger more seasoned veterans send the letters they do for one reason only, because they also work!

Cheers. . . . and BTW BOOMER SOONER

Account Closed · Answer

Three cheers for your enthusiasm!  When you say you have learned a lot, do you mean you have become aware of a lot through reading or actually learned how to operate a real estate investing business?  I am guessing from your post, the former.

I am a principal in a hedge fund, and we have done several projects in Austin.  It is a good market, although I do believe it is starting to slow a bit.  However, it still has plenty of upside for you.

If you are looking to buy and hold, consider joining your local REIA.  Nothing like networking face-to-face with experienced investors in your market.  You might also find someone there with whom you can partner on your first deal.

Alternatively, I know of a good trainer who will drop in and help you actually get a deal or two under your belt...not just tell you how to do it.

One more thing, Austin has a private lending fund located there to help you fund your deals short or long term at competitive rates.

You are wise to proceed carefully.  At the same time, beware of analysis paralysis.  At some point, you have to act.  Risk free deals don't exist.  Very low risk deals have paltry returns.  Determine your worst case scenario on a deal, and if you can live with it, get in the game.  You miss 100% of the shots you never take.

Paul Nguyen · Answer

@Jason Hirko I am marketing to the in the outer areas of Austin, such as the 78745 area, Pflugerville, Hutto, and Cedar Park. I agree, wholesaling is definitely a good way to get profit but I think if I got a house under contract I would try to find a way to finance the purchase rather than sell the contract haha.

@Nasar Bhegani  I agree, building capital is definitely a big goal of mine. Thank you for the offer! I will definitely reach out to you.

Jason Hirko · Answer

Welcome Paul! Sounds like you're on the right track getting your education. What areas of town are you targeting? This forum and others can be a great place to sell assignable contracts. You can then use the proceeds from a few of those to get your down payment for a bigger project!

Carrie Hiner · Answer

I suggest starting with an FHA loan on your first property - live in it yourself.  Build equity naturally.  It's hard to buy in Austin without funds.  There are hard money lenders out there but they will charge 10% interest and are not really designed for long term financing.

Hello Everyone, What are the crucial steps I need to take?

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