New to investing looking for help on where to start.

7 Replies

Hello everyone I am Conner I am 21 years old and live in Yreka CA. I am new to investing and I am wanting to start out with rehab and and flipping houses and also try to do some but and hold BRRRR method investing. Just looking for some advise on where to start I have been listening to podcasts and also reading a few books.

I would not recommend flipping, or using hard money if you're just starting out especially if you have limited funds. Hard money Is very expensive, you will need a larger down payment if you're just starting out and you need reserves to pay for your mistakes and cost overruns. The interest carry will eat your profits fast especially if you struggle to get the project done and sold quickly. You are better off finding private investors and doing a JV structure.

The best way to get started in REI is by wholesaling (which is the assignment of a contract) Once you have done several deals, gained some experience and have set aside some cash then you could try a flip or other strategies. For now I recommend you focus on getting really good at finding buyers and finding good deals.

First step is to make sure you understand the laws in your area regarding wholesaling which is the assignment of a contract and double closes. Several states have passed laws calling wholesaling brokering and are requiring a real estate license to wholesale.

You should talk to a real estate attorney or title company that works with investors in your area to ensure you are in compliance with any laws. They will also have the proper contracts as well.

Next you need to educate yourself on the business and your market. You really need to immerse yourself and learn all you can. Attend REI groups and meetups and network with other experienced investors.

Start with finding cash buyers. You want professional legitimate cash buyers so you know you can close on the deal and do what you tell the seller you will do. I can’t emphasize this point enough. You do not want to contract a property unless you know you can close it or take it down yourself.

Different types of cash buyers are flippers, buy and hold, subject to and lease option. You need to find several of each of these types of buyers and learn what they are looking for.

Best way to find cash buyers is networking at local REI meetups, masterminds, Facebook groups, Realtors, title companies, closing attorneys, property management companies, auctions, Craigslist, and bandit signs.

You can search real estate transactions in your tax database. Look for entities and individuals that have bought multiple properties. You may need to search by the address of the buyer as they may change their name or the name of the entity on each purchase. You can also buy lists from companies like list source and there are some REI software companies that have a cash buyer search feature.

Best way to find motivated sellers is to purchase lists and compile lists from city and county for 60-90-120 days late on mortgage, pre-foreclosure, delinquent taxes, water cutoff, code violation, probate, divorce, high equity, etc. and mail or cold call.

Other methods are driving for dollars, door knocking, wholesalers, craigslist, Realtors, FSBO sites, expired listings, foreclosure sites, put out bandit signs, billboards, newspapers, other offline publications.

If you have the funds you can run TV commercials, do pay per click/adwords, facebook, Linkedin, Youtube, and other forms of online advertising and social media postings.

Bottom line is consistency. You need to take consistent focused action every day, answer the phone when it rings and follow up and follow through. Lots of deals are made on the follow up.

Originally posted by @Conner Bridwell :

Hello everyone I am Conner I am 21 years old and live in Yreka CA. I am new to investing and I am wanting to start out with rehab and and flipping houses and also try to do some but and hold BRRRR method investing. Just looking for some advise on where to start I have been listening to podcasts and also reading a few books.

Welcome aboard Conner. Do you own your own home? If not I always advice folks to take care of home base 1st then move onto non owner occupied properties. No sense trying to do a BRRRR when you can pick something up for next to no money into the deal with an FHA loan right off the rip.

@James Wise thank you for your reply and yes I have bought my own home using fha loan and it appraised for 20,000 more than I purchased for also I have been working on remodeling it. It has old paneling old wood cabinets a drop panel ceiling and old carpet and vinyl flooring. I estimate i will be worth 160,000 when done and I bought it for 94,000.

@Conner Bridwell  Mailing is probably the best way to find your own off-market deals. These are people who share motivational characteristics of people ready to sell, but haven't yet done all the work they think they need to list property. The best way to find them is to send out mailers.

Some good lists to target are Absentee Owners with Equity, Seniors with Long-time Ownership and Homeowners with Low Financial Stability Scores.

You can work with a list broker to optimize your list for your area. From there, there are a lot of companies that can help with the printing and mailing. Be sure that you highlight that "selling your house can be easier than you think" with the advantages of working directly with you instead of the more traditional route.

You can get a list of Owners with Low Financial Stability Scores that have been in the property for a while. These folk most likely have deferred maintenance and haven't updated. The list can include the home value, loan to value (equity), income etc. The original list will have the name and mailing address. Your list broker should be able to add phones and emails where available in a second step.

The alternative is driving for dollars, but you will have a much smaller group to call after you spend a lot of time locating property and researching the owner's contact information.