Lets beat this dead horse....

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Lets beat this dead horse....

Chris Hopper
Investor · Cypress, TX · Member since 2015 · 143 posts · 144 votes

The new year has arrived, so let's discuss one of the dead horse topic I see here time & time & time & time again - 

I'M DOING MY RESEARCH AND HOPE TO PURCHASE SOMETHING WITHIN THE NEXT YEAR (OR TWO, OR 6 MOS, ETC).

For those newbies who are just getting started, great!  Glad you're getting interested.  What is it exactly that you are looking at, researching, team building, getting your ducks in a row, etc.  What is holding you back from buying something right now?  I've seen folks be presented with 100% true deals and pass on them.  Yet they turn around and make a post here or on FB asking for deals?  One of the contractors I use has been asking for deals for over 2 years now and still hasn't bought anything.  I've presented him with absolute deals just to get him started - even offering to partner just for the security factor for him (buy the way, I've bought every deal I sent him).  

So I'm wondering rather than spending so much time putting all the other stuff mentioned above into play, why not focus on what's truly holding you back?  I believe one of the biggest (probably THE biggest) factors is people are just scared.  And that's ok, and is the point I'm trying to get to.  So why not just mention that and partner up on the first (or few) deals until you get comfortable, until you find good contractors, until you know how to refi out a rental?  You can spend countless hours watching podcasts, reading books, going to events, etc and spend 6 mos "learning" before buying your first deal ------ only to realize you're still going to make all the mistakes!  You might overpay because you don't know the market or submarket, got screwed by a contractor, didn't estimate repairs correctly, unexpected delays or repairs you weren't aware of, and a number of other issues that can and WILL pop up.  Now, not to say any of these can't happen with an experienced partner, but the risk will definitely be minimized a great deal.

So rather than waiting 6 mos to buy 1 deal yourself, wouldn't it make more sense to partner up with someone RIGHT NOW and start learning hands on?  1/2 of something is better than 100% of nothing.  6 mos from now you could have 1-3 deals under your belt and now ready to run 100% on your own.

If you can do basic math, you're ready to go - I can buy it for "x" amount and sell it for "y" amount with "z" amount of repairs....Is there a profit there that I'm happy?  If so, it's a deal!  Everything in between (including the "z" number) isn't something you can read or study your way into.  You need the real world experience to be successful.  Don't let your ego or greed stop you from partnering with experience.  

Now, don't just jump into a partnership with anyone!  Ask for proof.  Have them show you stuff they've bought, any rehabs in process or houses on the market, etc.  There's plenty of guys with good names out there who can help.  If they can't show you proof of experience, move on quickly.

Happy new year everyone and good luck in your journey.....just don't take forever getting started, that drives me crazy!  Buy something now.  

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Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
6y

Fear and comfort are powerful and keep us from trying new things.

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  • Jennifer Edwards
    Flipper/Rehabber · Houston, TX · Member since 2019 · 20 posts · 15 votes
    6y

    @Chris Hopper newbie here! Great topic! I’m not scared to jump in. I’m scared to end up one of those people you are taking about. I started my research in October and I have recently moved from the research phase to the active phase. Instead of a goal to buy in 2020 I set my goal to buy in the next 90 days. Don’t want my rehab to be done after the summer. I’m of the mindset that the first one is for education and you generally have to pay for education. So if I manage to break even it was a good first deal. Of course I’ll analyze on the front end for profit. To push me along In this stage I have eliminated tv in January and wrote down a list of lead actions I look at twice a day and I never let a day pass that I don’t that I don’t do something on that list. I’m super psyched and motivated!! I hope this isn’t just a phase!

    2Reply
  • Vijaianand Thirunageswaram
    Real Estate Broker/Owner & Property Manager · Sugar Land, TX · Member since 2013 · 660 posts · 459 votes
    6y

    @Crislie P.  That's great question. Being in BP forum and contributing for years, many approach me to ask whether I can be mentor or partner with me. So I started mentoring since last year and have quite few mentees. I also partnered with few BP Investors on flips and helped them to teach the trade. BP forum  has been a great platform to connect, share and help each other. 

    Speaking just from my end, I follow process which I filter out the interested investors through questionnaire and meeting before start helping them out. There are also many investors in Houston who are willing to partner and help out but newbies just need to venture out and talk to them and figure out whether it will be good fit for them. 

    0Reply
  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    6y

    F.E.A.R

    False Evidence Appearing Real. 

    You are a legend for writing this @Chris Hopper!

    People say I need to do X before Y can happen, but only after Z comes first tho? 

    @Cody L. Totally agree with you! I get those messages/calls all the time "Ola, can you have coffee?" and I want to scream YES YES YES from the mountaintop, but the reality is my wife wants to have dinner with me, so does my 2-year-old daughter wants me to play with her, and my friends have a get together I need to at! 

    So, as investors, we all have to be very cognizant of our time including the person asking to pick your brain over for coffee. I know this is classic advice you hear on podcasts, and I think it is great advice. However, be sure that you are really ready to take action before asking for other people's time. 

    My simple advice to people (IF and if you really want to do REI long term): Find a partner and get started today, be an apprentice if you don't anything else to offer (just shadow and/or get coffee)...Don't listen to your brain telling you are too awesome to get coffee! Ego is a dream killer, humble yourself. 

    1Reply
  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    6y
    Originally posted by @Crislie P.:

    @Vijaianand Thirunageswaram @Chris Hopper how do you find a mentor? Is there people out there who is really willing to mentor a stranger they just met?

     One way to find mentors is by spending more time on BP, a site with more than 1.5M investors. 

    Also, be willing to pay for a mentor OR help them out in some way. This shows commitment to yourself and obviously to the mentor that you are really serious about REI...

    0Reply
  • Vijaianand Thirunageswaram
    Real Estate Broker/Owner & Property Manager · Sugar Land, TX · Member since 2013 · 660 posts · 459 votes
    6y

    @Katherine P. Wow @Chris Hopper your beating horse topic is getting national attention. Good to hear that you are taking a big leap to invest out of state. It surely needs some guts. Kudos!! I always want to try but Texas has so much to offer and I am still not mastered yet so didn't go beyond it.  You are right, it's not about inertia at time but something else along the lines in the process might keep some one to take next step.  Good point!!  When I talk to people, they say it might be waking up in the middle of night if they manage the property. I tell them, it never happened to me in the past 10 years of working tenants. So if its just a myth to scare people away. Even if it happens, it's not big deal and you will many resources to figure it out.,  In your case, Property manager, I totally agree with you. Property Manager can break or make the deal work. 

    I manage some properties for out of state investors who found me through BP and I do it to help them build their portfolio not to make money out of it. Property management is at time time consuming process and the fees don't even justify the work we do it but we still do it to help investors. We hope to get compensated from the next sale or rental lease they give. It's give and take. Do find a good property manager who cares for your property and your investment goal not for the fees. Also i recommend you to find mentor or guide who can help you answering questions anytime, it will surely help you long term.


    @Jennifer Edwards  Good progress!! This is what me and people like Chris is trying to accomplish to get you all out of the comfort zone and take some risk and venture out. Without getting wet, you will not know the creek is too deep for you or just seems deep. 

    2Reply
  • Vijaianand Thirunageswaram
    Real Estate Broker/Owner & Property Manager · Sugar Land, TX · Member since 2013 · 660 posts · 459 votes
    6y

    @Eli Gilbert As @Chris Hopper We are good people all around, just need to look out for it. I have taken newbies from BP last year and 2018 and made few deals happen for them. So you just need to come to table with open mind to learn and make it happen. 

    1Reply
  • Matt Romero
    Investor · Tallahassee FL · Member since 2018 · 2 posts · 0 votes
    6y

    I spent many years watching from the sidelines. I became a professional student. At the time, I didn't realize that was happening. In fact, I thought I was part of the way. 

    Every time I stuck my toe in the water, I would go back to the books to learn more. Later I realized that I found safety in hiding behind all the studying.

    It took me missing out on countless deals to realize that I was missing out on opportunities. Even more crazy, it took my wife asking me when I was going to actually go through with a deal before doing it. 

    To me, it makes sense to partner with an experienced investor. Granted you've vetted the potential partner. I completely agree with you, put some deals under your belt and grow from there.

    Cheers to 2020

    0Reply
  • Annie Baker
    Realtor · San Jose, CA · Member since 2018 · 8 posts · 8 votes
    6y

    I can relate about not jumping in with out of state investing and reading/asking/learning probably longer than I should have..I have had rentals, just always local. So here I am, about to jump into my first out of state investing and doing it as a 1031 exchange. What I need is a lender (most likely a portfolio lender) who will lend in Ohio, while I live in California. I am going to be buying multiple multi family properties (mostly duplex-fourplex, but maybe add 1 8-unit), anyone have anyone they recommend for a $350k loan? Will be investing a total of around $600k. Talk about go big or go small for my first out of state investment project haha!

    0Reply
  • Brendan Flannery
    Rental Property Investor · League City, TX · Member since 2011 · 59 posts · 23 votes
    6y

    @Janette Nason Analysis paralysis. I would find good deals, get stuck on the numbers, and by the time I had the confidence the houses were sold. 

    2019 I set a goal to get one rent house. I bought 3. 

    2020 I am setting a goal for 5 properties. I am going to start a direct mail campaign and hopefully expand my funnel. 

    2Reply
  • Michael Barry
    League City, TX · Member since 2019 · 37 posts · 17 votes
    6y

    @Brendan Flannery that's awesome how you set the bar you wanted to achieve and then crushed it! Are you focusing in our neck of the woods or are you investing in other areas?  I'm really interested in how you put together your team and if you have any advice to share about selecting people to work with.  

    0Reply
  • Cody L.
    Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    6y
    Originally posted by @Ola Dantis:
    Originally posted by @Crislie P.:

    @Vijaianand Thirunageswaram @Chris Hopper how do you find a mentor? Is there people out there who is really willing to mentor a stranger they just met?

     One way to find mentors is by spending more time on BP, a site with more than 1.5M investors. 

    Also, be willing to pay for a mentor OR help them out in some way. This shows commitment to yourself and obviously to the mentor that you are really serious about REI...

    BP has 1.5m USERS (I assume your 1.5m is true). But how many are INVESTORS? I bet 1m of the 1.5m created an account, asked if they should start an LLC, and never posted again.

    I don't post many QUESTIONS anymore as I find they get no replies. There are not many people who are active buyers. I'd pay for a BP membership if there was some forum just for active investors (vs. forums just for people who paid). Not to sound elitist but I think if there was an investor only sub, investors would follow it and there would be more activity. But if you're an investor and you have a question you have to post it in the same forum that "Should I start an LLC?" questions go into. Which is HIGH noise to signal ratio.

    Anyway, I'm drifting...   When I'm asked "How do you get started in RE?"  I answer "Get started".  Sounds overly simplified but it's not.  Or it is.  Or it simply is what it is.

    3Reply
  • Brendan Flannery
    Rental Property Investor · League City, TX · Member since 2011 · 59 posts · 23 votes
    6y

    @Michael Barry the 2 single families are in Dickinson and the triplex is in Galveston. As far as a team, my wife’s aunt is a realtor, she referred a hard money lender to me, I still don’t have a great crew for the rehabs.  Although I am starting to find their strengths and know what they can do well and what they suck at. 

    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y

    @Annie Baker Over the years I have met multiple lenders I would be happy to share with you. They are based in Columbus, Ohio but their institutions do business in all of Ohio.

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
    Reafco512 Reviews
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    0Reply
  • Kai Van Leuven
    Investor · USA · Member since 2015 · 325 posts · 447 votes
    6y

    @Scott Trench

    I like your post and your style. I have never been one to suck up to people but... nope can’t do it, lol.

    It is a good point that wages may not creep up that much past inflation. I wish that were not the case because I feel like a thriving middle class should have more room in their pocketbook than just covering the cost of things getting more expensive.

    Education, healthcare and housing have been running over the last few years. There should be a huge incentive for folks getting out and being productive in society. Those three expenses are covered if you don’t make enough by our government (education grants, Medicaid, section 8/projects).

    Yes Seattle is a mess, I do love it for the Hawks, Dawgs and Mariners but the city itself has become less than desirable.

    If you are ever north of Seattle hit me up, McDonalds on me!

    1Reply
  • Chris Hopper
    OP
    Investor · Cypress, TX · Member since 2015 · 143 posts · 144 votes
    6y

    @Vijaianand Thirunageswaram, WOW!!  Lots of responses from all over.  I was hoping to hit some local newbies and hit everyone else!  Awesome.  

    @Katherine P. Congrats on taking action, LOVE IT!  That's what this post was meant to bring out - what EXACTLY are you afraid of?  We can show you how to overcome it.  Why are you investing long distance?  Why don't you find something local (just curious).  I never advise a newbie to do that, but if you're comfortable, go for it!  Reach out if you need any assistance at all.

    @Jennifer Edwards, keep it up that's what it takes!  You have your mind in the right place.  Most people do a deal, think they're going to hit a homerun with no issues and get discouraged when it doesn't go as planned.  You're doing it right!  Would be more than happy to help you any way I can.  Reach out anytime and I'm pulling for you to find something soon!

    @Matt Romero exactly!  Again, this is why I made this post.  You can't continue to sit on the sidelines.  I said it earlier and I'll say it again - YOU CANNOT STUDY YOUR WAY OUT OF MISTAKES.  Real world experience is the best.  Jump in and you'll find a way to make it work.  Good job pulling the trigger.

    @Annie Baker kudos to you!  Go for it and you'll find a way to make it work.

    @Brendan Flannery good for you.  Set your goal and you made it happen.  What kind of mistakes/issues did you have on your first couple of deal.  I'm sure some of the newbies would love to hear.  Again, we all make them and that's ok!  I'm sure you learned some things and are even more comfortable now.

    @Cody L. on point! That's my answer as well - just do something. Buy something. Sooooooooo many people worried about the wrong **** here. Do 5 deals, then worry about an LLC.

    Good to see some newbies not scared to post about their fears.  Sit down and ask yourself why you're not buying something.  If someone brought you a deal right now that was making a decent (not homerun) profit, would you buy it?  If not, the what is the EXACT thing holding you back?  Overcome that and you got a deal all of a sudden!  BUY IT!  Move forward.  Make something happen.  Make some mistakes.  It will be OK.

    1Reply
  • Anthony Johnson
    Real Estate Broker · Dunedin, FL · Member since 2015 · 74 posts · 43 votes
    6y

    A wall could be a sign, telling you to go a  different direction.   You could say, well if the PM does not appear, maybe I could invest with a syndicator and take my return.   Or maybe you could by a larger building with mgmt in place, etc.  When I would plateau, I would get frustrated at the lack of growth, and one of my early coaches told me that you are hitting a glass ceiling, it hurts, do you bust thru?   If the glass is too thick here, maybe you move over there and it is thinner( different business plan)  If I was your mentor I would say to understand if this is  a challenge that needs to be overcome, or a natural/spiritual/subconsious driver trying to turn you in a different direction.   Buying one or two doors at a time in states far away is not what I would recommend for most people.  I manage for absentee owners, and my company does turn key from  purchase to rehab to mgmt for many out of state investors, and this is good for some, not for all.   When I read you post, my first thought was you need a mentor who can look at your entire financial picture and see what the best step is.   When investors call me, the first thing I do is analyze the big picture, and we take a holistic approach.   best. 

    0Reply
  • Matthew Brown
    Duluth, GA · Member since 2017 · 11 posts · 4 votes
    6y

    @Chris Hopper

    I love this. I am home hacking at the moment and am looking to buy my next property, but I’ve realized the biggest thing to accomplish my goals would be to get a partner and a mentor.

    Great post

    0Reply
  • Chris Hopper
    OP
    Investor · Cypress, TX · Member since 2015 · 143 posts · 144 votes
    6y

    @Matthew Brown, good for you for recognizing that.  A partner or mentor now is better than waiting 2-3 years thinking you're going to "learn" something better.  

    0Reply
  • Kyle Smith
    Rental Property Investor · San Diego · Member since 2019 · 109 posts · 87 votes
    6y

    This post seems timely because of the New Year and all the folks who are absolutely resolute that 'THIS IS GOING TO BE THE YEAR!' they finally stop running the numbers a million times, doing their due diligence over and over, researching everything they can get their hands on etc and actually pull the trigger on an investment.  

    The mantra is 'I need to do XYZ first and THEN I'll be ready'. The truth is, there's always more to know and improve on. At some point, you just have to jump in. 

    Next year is always coming; just ask any Padres or Chargers fan around here... 

    0Reply
  • Michael Barry
    League City, TX · Member since 2019 · 37 posts · 17 votes
    6y

    I looked at the property I mentioned a few pages ago.  It is a no-go for me, major foundation and structural issues that I don’t want to deal with on my first investment. On to the next one! 

    0Reply
  • Chris Hopper
    OP
    Investor · Cypress, TX · Member since 2015 · 143 posts · 144 votes
    6y

    @Michael Barry sorry to hear, but that would have been a good one to partner on.  Foundation issues are extremely common in the Houston area and pretty much an easy fix.  But if you're not comfortable, keep looking.  I'll go look into it, lol!

    1Reply
  • Michael Barry
    League City, TX · Member since 2019 · 37 posts · 17 votes
    6y

    @Chris Hopper yes please check it out! 

    The foundation settled so badly, the brick siding on a few sides is bowed out, the ceilings and walls were all out of square and drywall busted, windows with 2in gaps and the roof was bowed. 

    0Reply
  • Mark Sewell
    Investor · Houston, TX · Member since 2017 · 1k+ posts · 871 votes
    6y
    Originally posted by @Chris Hopper:

    @Eli Gilbert there are plenty.  I do it and have done it.  Obviously you need a conversation and some ground rules, but the cliff notes version is if you bring me a deal and are putting up some money or something, why would I turn down some free money?  If I believe it's a deal I'm ok with 50% (or whatever split is worked out).  I didn't have to spend marketing dollars or work for the deal.  Typically a newbie will only have a deal - not financing or contractors.  I have all that, so I'd be a fool to turn down a small profit.  Keeps my guys busy, teaches a newbie, and we all make a little money.  Plenty of investors will do the same.

    Might take you up on this, brother.  

    I would prefer to focus on the acquisition part of this and get deals in the door.  Can maybe even steer some funds or at least credit toward the deal.  Might get a couple of us newer guys even to partner up in fact.  

    What I lack, in additional funds and experience, is a good crew and I know you already have one that you need to keep busy.  Sure I have limited funds and limited experience, but I have already arrived the same conclusion that it is better to run in herds and work in cooperation where possible.  I can also dedicate some time at the job site, buy materials, etc. if needed, things like that.  Part of the rehab process I am comfortable with, some not so much.  I also got my @ss handed to me on me back on that first flip, I've not made that a secret, so hoping this year I'll bounce back and get another project going (I have handed off a couple).  For sure, it would be way more fun and far less frightening to do a partner deal in 2020. 

    0Reply
  • Chris Hopper
    OP
    Investor · Cypress, TX · Member since 2015 · 143 posts · 144 votes
    6y

    @Michael Barry there's multiple offers on that one.  I'm not going to waste any time on it unfortunately.  

    @Mark Sewell Let me know if you want to meet up.  I'm definitely open to putting something together with you.

    1Reply
  • Nick Rutkowski
    Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
    6y

    @Chris Hopper

    I personally would rather have someone loan me money rather than partnering up. Sign a promissory note with some good terms and let’s go. Call me crazy but I think I can make my investment deals smoother without a second person’s criteria being mixed in.

    Of course, there are plenty of ways to form a partnership without the second person’s involvement and as a beginner is definitely easier with a second person. But then again, that can get messy too. As my better half always says “you’re just too hard to get along with.” I don’t think she’s that far off...

    0Reply
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