Dallas, TX · Member since 2016 · 16 posts · 2 votes
Hey guys,
Just wanted to come on here and introduce myself. My name is Gray and I have lived in the Birmingham area my whole life. I have been wanting to get into real estate investing for a while but i didnt want to pull the trigger on any properties or deals until I felt decently educated, so I have been reading, listening, and studying as much as I can in the past year or so and bigger pockets has been a godsend. I am looking to do my first deal and any pointers or tips anyone could give me would be well appreciated. Thanks guys and I look forward to hearing from you guys!
Welcome to BP family! You may go through the "Education" tab under your account's main page that has some valuable links. Further more, you can go through our forums https://www.biggerpockets.com/forums and you can find some helpful advises there or can post your queries there so potential members can answer to you.
Thanks @Rob Drum. Yeah I am looking for my first flip deal or considering the BRRR route. Whichever presents itself to me first is the route I will take on my first deal. I feel like I am having a hard time finding decent deals though. I have a real state agent that sends me all listings in the area I am looking in from the MLS but not one seems like a decent deal. Are there better ways to find my first deal? I read about direct mail but I wanted to have more experience before I went knocking doors down. Are investment groups a good place to start?
@Gray Cato Consistently going to the REIAs is the best place to start! Also, If you aren't already house hacking, I think that's the very best way to get started investing.
You can find deals on MLS, but usually you can't pay the asking price. Just look for listings that have been on the market for a long time, or look beat up. Shoot for getting them at least 20% below the asking price. But, if you're house hacking, you don't really need that big of a discount because you have so many other things working in your favor!
Here are the links to the REIAs and Meetups I've been to. They're all a little different, but all great!
@Rob Drum thanks for the info! I have been to one of those groups meetings before but will definitely check out a few of the other ones as well. Do you know of any good wholesalers in the Birmingham area that i could use to try and get my first deal closed? Im just trying to use every avenue i can to find potential homes. Thanks!
MLS is really hard to find a good deal in your market from what I've seen posted. It's good you're going to start networking at the REIA. It'll help you build a team, and if you're lucky maybe even meet a decent wholesaler to pick up a deal. If that doesn't work out, at least check out driving for dollars:
It works well with DM. If you want a DM game plan or help with a DM campaign, feel free to message me, I can provide you checklists, templates, scripts, etc.
Thank you @Ray Lai. I was actually discussing DM with my girlfriend last night and seeing if that was something we should start with. I would love to hear your thoughts and ideas on how to get one started so I can avoid some mistakes Im sure a lot of new investors make!
Here is a gameplan if you want to use direct mail to find deals:
1) Attend your local REIAs and network, you need to build a buyer list of investors that will buy your properties and network with other people in our industry. Do not spend too much time on this but at least know a few guys at your local REIA that are actively flipping that you can sell to when you get your first assignment. 2) Next develop your strategy, build a list of at least 200 properties to mail to. Response rates are typically 0.5-2% so the bigger the list the better. Options include driving for dollars, absentee, probate, using listsource if you are not in a competitive market, buying lists that are exclusive for your market type (we partnered with a guy that does this) 3) Start a sustained direct mail campaign. First batch with postcards using first-class, then follow-up with yellow-letters using standard mail. There is no point in starting if you cannot sustain because statistical data shows that responses typically occur after at least 3+ mailings. You want to use postcards first since they are cheaper and some may bounce so you can remove the bad ones off your list and skip-trace those so you do not waste money mailing to bad addresses. If you wanted to, you can even skiptrace the bad addresses to find where the owner moved and target the right address.
For fulfillment you can do it yourself to save money if you are broke, but ultimately if you want better response rates and focusing your time on value-add, then you will want to outsource fulfillment to a shop that has economies of scale and can offer you great rates. Remember, a campaign usually does not get a response until 3+ mailings. A lot of newbies quit after 1 or 2 letters without realizing that people do not open the first letter they see. Focus and sustainment is the key. I would recommend a different marketing piece every 4 weeks for 5-7 months from past data analysis, but you should test this out for your market and see what works best response rate wise.
Also, when you become more advanced you will want to do split testing and other methods. You should always be tracking your response rates and seeing what lists work bests. It is always best to include a website and a local phone number on the postcards as well to maximize your responses.
Another protip: If you are in a competitive market, deals are harder to find however if you do find a deal, someone will be much more likely to split the profits and show you the ropes if you make a friend in the industry. It is better for them to get half the profits than no profits, and you gain invaluable experience as they take you through the process with them.
DO NOT go half-cocked and mail without having an understanding of the legal requirements for your area for assignment contracts. That is how you get in big trouble.
Another recommendation: If you want to make even better money, invest in yourself and become a licensed real estate agent. That way you can buy houses from distressed homeowners (wholesaling) and sell the homes in good condition for a nice commission. You also learn a lot like how to run comps and get direct MLS access which is nice.
Hope that helps. Shoot me a message if you wants scripts or a checklist of things to prep before starting you DM or coaching.
