I am a Chemical Engineer and now working in Consulting for Chemicals, Oil ans Gas companies. I recently decided to take the big step towards my real love that always was Real Estate Investing. The opportunity to interact with people from different parts of the world and help improve the quality of life in local communities is my real passion.
So I am looking for advice on where to find buyers and also would like to connect with other investors with the same vision
Is anyone based here in Houston, Texas or Texas overall?
@Charleine Nyeck awesome!!! I’m a ChE too and I’m just beginning my journey!!! I also live in Houston. I’m currently learning more on wholesaling in order to get my feet wet. I’d love to connect.
@Mark Sewell I was thinking that, since I am still new to this, I would start by completing 2-3 wholesales in order to learn how to recognize and analyze a good deal, negociate, etc. Then I could move to fixing and flipping. That is why I am looking for ways to build my buyer's list. What do you think of this approach?
@Nakeisha D. Always happy to meet a ChemE fellow! Let's connect. I am starting with wholesaling as well
@Joye Thomas I was feeling the exact same way when attending different RE seminars and masterclasses. But I am trying to create a plan and stay focus on a few things at a time
@Charleine Nyeck one way I’ve started to build my buyers list is to seek them out on Facebook. There are a number of groups that I’m part of and people post deals daily. There are also people looking for buyers in an area and they just ask and I follow those posts. There’s also this video that I found very helpful (below). Networking is very key in this industry I’m finding. I also linked up with another experienced wholesaler and we’ve talked about joint venturing together. He has an established buyers list.
@Nakeisha D. Thank you so much for sharing this. I will definitely watch the video. And you are right, Networking/Word of Mouth are really key. So what I did recently was to start introducing myself and giving a description of what I do in my different social and professional groups. I will also join real estate groups like you mentioned. Another thing I am working on is building a team (real estate agents, birdogs, etc.)
This is going to look self-serving as heck, but this was my position for years (hopefully my posts in previous years will serve as evidence).
Get qualified to be a buyer. Go get with a hard money lender, one that is local, and get some indication that you are able to buy a house. They/we would walk you though some numbers and help you understand what you would need to have in terms of liquid capital to get your deals funded.
If you are knowingly putting houses under contracts that you are not able to buy, then you are not helping anybody. Some would say this is illegal. I would say it is, at best, misleading.
It might seem like a great way to learn BUT there is a likelihood that it can harm sellers.
I paid a 'coach' that would teach people to wholesale. We did manage to get a house under contract at what we thought was a good price. The plan was to blast it out to a massive buyers list and split the fee. If no buyers step forward, then we bail during the inspection period. Lots of people teach this, nothing new here. And in fact, it did happen that we backed out later - the coach was wrong on the numbers - ARV was too high and repairs too light. Now in my own defense, I actually could have done that deal at the time, but only just barely and I didn't want to take on that much risk. Then I saw that the seller was listed on the preFC list, like a week or two later. I felt like crap for needlessly tying up the house, and never did this again. Did I break the law? No. Did I act with integrity? Hmmmm.... probably not, because no matter how many disclosures I provide as a wholesaler, the seller thinks they are selling to a real buyer. I had the ability (barely) but not the intent. Fortunately the seller did get it sold, but what stress did I cause that person? Imagine if the seller had lost that house to FC. I don't even like telling this story, for obvious reasons.
Now let me clarify - the practice of assigning a contract from you to some other investor is perfectly fine in TX. But YOU need to be prepared to buy it if you are unable to assign it. My opinion only.
And there are a number of real investors around town that are wholesalers - but they do buy houses. They are not just pushing paper. And think about it: deals do not all come in at regular intervals. I might have 3 and you might be finishing up a flip and looking for your next deal. I offer you one of mine, for a reasonable fee. That is why investors run in herds. But the seller gets taken care of, as agreed.
Plus if you are working with a local HM lender, then they are going to tell you what they think of your deal. They are going to help you correctly arrive at the ARV, and they are going to question you a bit on your renovation budget. After all, the lender is putting their funds into YOUR deal, so they are not motivated to be less than objective. They don't mind telling you that your baby is ugly (a coach doesn't care).
Right now don't know what stuff costs. You aren't sure how to evaluate deals, how to get comps, etc. That's fine, but make sure you are working with somebody like a lender or a money partner (not just some random coach) to help you underwrite these offers. You can learn.
Lastly, don't sell yourself short. I am always surprised the number of new investors we are able to get approved around here. My boss tells me I am not authorized to kill a deal - he does that, not me.
Very nice insights @Mark, I really appreciate you sharing. I understand the ethics behind trying to sell a contract while making sure you deliver the service as promised to the seller. And I agree. I have also been looking into money lending options (either private or hard money). So I definitely will connect with you