Any Suggestions for a Newbie??

Question

My name is Braighton Coey. I graduated from UC in 2011 with my degree in Architectural Engineering and now work with Messer construction as a Virtual Construction Engineer.  I'm looking to get into the real estate market and recently attended Than Merrill's $200 class. I have a pretty good concept of the entire construction phase (I think) of rehabs, but am completely new to the steps prior and after fixing the house. Throw in taxes and LLC structure and I'm lost.

MY QUESTIONS: What advice can you give to a new person like myself? What is something you wish that someone would have told you when you were first starting? Any MUST DO's and MUST DONT'S are also welcomed.

I pick up on things pretty quickly and am willing to put in the effort outside of my 40 hour work week.  Let me know your thoughts and I thank you all in advance for your comments and answers.

Kerry Baird · Answer

The duplex deal that you mentioned? Yeah, that.  Do it again.  And again.  And again.  Get to 10 of them and pay them off.  Or sell them and trade up.

Braighton Coey · Answer

I appreciate all your feedback @Barry H. I have just wrapped up going through the entire BP free course. I am most definitely very detail oriented and will have no problem whipping up an executive summary for you or others to review. I would actually prefer doing it that way because I don't want anyone to feel uneasy about lending money and I don't want to have the pressure from a "What if" type of deal. I like to take calculated risks and always have an exit strategy or backup plan. It also ensures that I have thoroughly analyzed the property at stake and in a sense created some credibility for those trusting me with their investment.

I bought my first house when I was 20. Not because I'm rich but because I had to. I was paying $800 a month just in rent alone, paying for college tuition, utilities, and so on. Not a sustainable lifestyle so I was forced to make a choice. I began looking at cheap houses that I could buy and fix as needed where my "rent money" wouldn't just be going to waste essentially. I found a duplex and bought it for $26,000 after everything. Redid all the electric (old knob and tube), Installed central air, and other kitchen/bath upgrades. All in all I am probably into this house $40,000 total. My mortgage is $210 a month and I rent out the upstairs to my best friend from high school for $300 a month.

I'm definitely excited about this venture and hope to one day be proficient as you have been to where I too can turn more down the private money route and then maybe still do a flip or two a year.

Barry H. · Answer

BRIGHTON - as a Newbie Investor, you are a Bird Dog - that is what you can bring to the table. You are obviously educated and thus have superior organizational skills.  I owned cashflow properties for 13 years (still have a few), but I have amassed capital and have moved into Private Money Lending now.   Whether you are experienced or not, good deals can be found, especially if you know your local area well.  Once you find them, you can't just shoot addresses to potential investment partners (like me).  You need to do a solid workup on the property and submit it for lending consideration.  BP has a great template you can use 5X for free:

https://www.biggerpockets.com/flip-analysis

Once you do this for a few properties, you will probably find one which matches the Lender's requirements - and YES, it is possible to get 100% funding. Understand, however that this means you cannot just go out and say "...Oh - I really like that property - and if I buy it and fix it a little, I will make 10% per year on my investment..." You have to find the $85K house in the $150K neighborhood or the dilapidated triplex which has 3 other multi-family buildings within a mile which are bringing in 2X the rent of the dilapidated triplex. You are working up the ARV(After Rehab Value) and selling that to your Lender. If the numbers pencil out, you will find a deal and you will make a profit on the Flip or Buy/Hold and rent it out.

Good luck in your Bird Doggin and if you have something you wanted to run past me - I am happy to assist you in your journey - just do you best to prepare a solid summary (as previously noted).

BEAR :-)

Braighton Coey · Answer

@Kerry Baird Awesome! Thanks for the encouragement. I could easily get $600 a month but he's sort of like my brother so it feels wrong. He is planning on moving out in a year or so and I'll be wanting to move on as well so that will open up 2 apartments for rent. I'm looking forward to that.

Bob Okenwa · Answer

@Barry H.

I'd like to pick your brain about your lending terms. Shoot me a PM if you'd like to talk about it.

Any Suggestions for a Newbie??

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