1 really good idea for newbies to get in the game! (Its NOT wholesaling)

OP

Real Estate Broker · Indianapolis, IN · Member since 2009 · 575 posts · 496 votes

@Curt Davis Yeah... I touched on that... in my area you can do leasing for 1 pm company or 1 landlord with no license. So essentially you can get started now and get the license once you sign a 3 or 4 leases... if need be.

I would assume most states have similar laws.

Jesse T.

Herndon, VA · Member since 2014 · 1k+ posts · 324 votes

With the caveat of being properly licensed, I think it is a good option for beginners. The real estate agent market overall seems saturated, but 95% are focused on sales. If you are properly licensed you can even get commission on a renter if you find them another place. If you are properly licensed - a rental open house could really set you apart from the competition.

It also helps for investors since getting a property rented can be one of the biggest challenges in getting started with real estate investing.

Matthew Buckley

Involved In Real Estate · Pompano Beach, FL · Member since 2014 · 16 posts · 11 votes

I am licensed in South Florida

What is my best way to contact landlords directly or find landlords ? How do i get their listing?

Val Csontos

Rental Property Investor · Annapolis, MD · Member since 2014 · 214 posts · 140 votes

Not to shut the idea down it is not bad one! For us it did not work so well. When we first started out in the late 90s we had tried this route and most of our clients were ungrateful.

They were gone to Europe for a few years and we rented out their homes and when they came back they were NEVER really happy about the condition of their homes. We looked-after the properties like our own, but did not matter. In their mind they imagined the house perfect, and after renting it our for 4-5 years(most of the time with cash flow) , they were disappointed about the wear and tear. So we decided only to manage our own properties.

Better way to start in my own opinion is sort of how we started:

Purchase for Buy and Hold, with Other People's Money. We used to borrow RE agent's commission on a 60 months note 0% interest so we could pay closing cost on properties etc....We purchased Refrigerator from first month rent, we did what we needed to do go get going, but in general creativity would always work.(Due to the highly leveraged acquisitions our cash flow used to be $30-$50 month/door but with lots of patience a decade and a half later now over $1000/door) We learned the slow way like most people: To work smarter, and not harder.

4 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

as you know I was amazed when I saw you guys in Action 10 years ago doing what your describing. And I have talked with other TK companies over the years about how you guys did things in Indy... And many followed.

What your describing in virtually every state would require a RE license to do it legally even if it was one home....

I remember vividly pulling up to one of the properties I loaned on that was being managed by the firm you were working with and there would be 5 for lease signs in the yard..

I asked what the heck gives with this.. the answer

Tenats drive up and call one sign if they don't answer they call the next and so on so who ever answers usually gets the deal whoever didn't well they were SOL

I think the same is true for direct mail and yellow letter type campaigns.

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Val Csontos

Rental Property Investor · Annapolis, MD · Member since 2014 · 214 posts · 140 votes

@Jay Hinrichs In Maryland you don't need a license to property manage. As a matter of fact many of the RE Brokers do make the RE agents sign a disclaimer, in case the RE Agents would want to PM, they must do so with out involving the broker's license in any way.

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

@Val Csontos

This Is why I said Virtually every state I am aware there are a few that do not require RE licenses but those are rare... I bet less than 10.

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Rodney Kuhl

Rental Property Investor · Fishers, IN · Member since 2013 · 381 posts · 69 votes

That's a great story, @Ryan Mullin !

OP

Real Estate Broker · Indianapolis, IN · Member since 2009 · 575 posts · 496 votes

Originally posted by @Jesse T.:

With the caveat of being properly licensed, I think it is a good option for beginners. The real estate agent market overall seems saturated, but 95% are focused on sales. If you are properly licensed you can even get commission on a renter if you find them another place. If you are properly licensed - a rental open house could really set you apart from the competition.

It also helps for investors since getting a property rented can be one of the biggest challenges in getting started with real estate investing.

Yep. Its a niche that very few have gone into. A hungry newbie could easily fill that void. And you are right... you can use the MLS to place renters as well..

OP

Real Estate Broker · Indianapolis, IN · Member since 2009 · 575 posts · 496 votes

Originally posted by @Matthew Buckley:

I am licensed in South Florida

What is my best way to contact landlords directly or find landlords ? How do i get their listing?

Pounding the pavement, Driving for dollars, cold calling... etc.

You can call for rent signs - Hey if found a tenant would you be willing to pay a commission?

Place ads on Craiglist in the RE services sections - We find tenants for Landlords!

FSBO props - Hey I see your fsbo has been on the market for quite some time... have you considered renting it out? I have clients looking in the area.

Expired MLS listings - Cant sell? Rent!

OP

Real Estate Broker · Indianapolis, IN · Member since 2009 · 575 posts · 496 votes

Originally posted by @Jay Hinrichs:

as you know I was amazed when I saw you guys in Action 10 years ago doing what your describing. And I have talked with other TK companies over the years about how you guys did things in Indy... And many followed.

What your describing in virtually every state would require a RE license to do it legally even if it was one home....

I remember vividly pulling up to one of the properties I loaned on that was being managed by the firm you were working with and there would be 5 for lease signs in the yard..

I asked what the heck gives with this.. the answer

Tenats drive up and call one sign if they don't answer they call the next and so on so who ever answers usually gets the deal whoever didn't well they were SOL

I think the same is true for direct mail and yellow letter type campaigns.

Yes sir! Competition is healthy! Very good for the investor. When landlords say that the 1st month rent is an expensive fee I always say "not as expensive as a vacancy!"

OP

Real Estate Broker · Indianapolis, IN · Member since 2009 · 575 posts · 496 votes

Originally posted by @Rodney Kuhl:

That's a great story, @Ryan Mullin !

Thanks!

OP

Real Estate Broker · Indianapolis, IN · Member since 2009 · 575 posts · 496 votes

Originally posted by @Val Csontos:

@Jay Hinrichs In Maryland you don't need a license to property manage. As a matter of fact many of the RE Brokers do make the RE agents sign a disclaimer, in case the RE Agents would want to PM, they must do so with out involving the broker's license in any way.

Keep in mind what I am describing isn't property management. Its just the leasing aspect of PM. Not sure how that changes things.. but leasing is essentially showing houses to clients in exchange for a commission.. So yes it is best to have a license.

In Indianapolis if you only work for one property manager you do not have to have a license. For example if you work for an apartment complex showing units and writing up leases there is no need for a license.

Also, if you have a broker in your office you can lease houses under there direct supervision with no license.

Soo... Are there ways to skirt around the intended rules... sure. BUT...

Bottom line... like I already said. If you want to something like this.. get your license.

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

your correct if you are an employee of a company that owns rentals you may act like a leasing agent other wise like I said in virtually any other state its a license activity..

Just like what most folks do here wholesaling requires a licnese but most just skate around it as its such a big transactional business that its impossible to police.. Now Ohio and Florida are cracking down.

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Bill Gulley

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

Originally posted by @Ryan Mullin:

For those who want to get into real estate but have little or no money this post is for you.

Essentially if you want to get into this business but don’t have money to invest you need to provide a service to make money and gain experience and knowledge. I wanted to take a second to tell everyone out there how I got started with basically no money and see what everyone thinks.

Usually the first thing on a post like this will be wholesaling. Everyone should get in to wholesaling! NO. There are to many people that want to be wholesalers. Its saturated in my opinion.

So what do you do to get started?

LEASING.

Charge 1 months rent to find tenants for landlords and property managers. - That is exactly how I got started in this industry 9 years ago. Here is how it works:

Step 1. Get landlords, investors and property managers to list there properties with you "for rent". Tell them you charge the 1st months rent as your fee and that you are non-exclusive... meaning if they rent the house before you do then your charge them nothing.

Step 2. You advertise and show the properties to prospective tenants. If you have no money then use free advertising resources like Craigslist, Postlets (zillow), rentlinx, hot pads, etc, etc...

Step 3. If the tenants like the place then you get an application and an app fee. You then process there app and turn it into the landlord. If they accept the tenant then your fee is the 1st months rent.

Rinse and repeat.

As you first get started with this you want to plan on getting your broker license asap. In my area you can do leasing for one owner or management with out a license. So once you have multiple clients you will need to be a broker. I was lucky enough that my first client was a good size PM.. so I was able to make enough money to support getting the license and growing the business.

Once you get too busy to handle it all your self you can bring on another agent. You can pay your agent 50% of the 1st months rent or possibly 35% depending on market rents in your area. Once you have multiple agents... all the sudden you have a real estate brokerage that you own.. focusing on rentals...

____________________________

I will never forget this: I was 25 years old and I met a very wealthy entrepreneur who owned and operated one of the worlds biggest sporting goods retailers (before selling out to Dicks). He asked me what I did for a living.. I said... "I own a real estate brokerage that focuses on rental properties"

He paused for a long while... He said.. "Son... that's pretty damn aggressive."

_____________________________

I wanted to take a second to post this on BP because it did SOOOOOO much for my career in real estate investing. Obviously this is an extremely abbreviated synopsis on leasing and how to use it to get started, but I think this forum post could spark some interest in some noobs and get a conversation going.

When you rent hundreds of properties all over the city you real start to learn neighborhoods, demographics and the over all mentality of investing in buy and hold properties. You get to talk to hundreds of investors and property managers and learn ON THEIR DIME, while you make a steady income.

Every day on this website I see "newbies" asking what they need to do to get in on REI...

This is how I did it and It has shaped my entire career.

I would like to know what everyone thinks about my way of getting going in this great industry and what questions / comments everyone might have! Thanks!

Wow, and if you didn't have a license, you're sooooo in violation of real estate licensing laws.

I'd suggest the best way to begin in RE is not violating laws, just a thought.

I didn't have to read other posts for this comment.

Well, I saw Jay's post after posting. So, edited: Claiming you're an employee won't fly, when you're "employed" by more than one owner, or when you get hired, then quit, then get hired by someone else, then quit, get hired again, then quit, then find a new employer......really, all the tax stuff in order, any employment contract, let's not play silly games, a leasing agent requires a license unless you're a real employee of the owner. :)

OP

Real Estate Broker · Indianapolis, IN · Member since 2009 · 575 posts · 496 votes

@Bill Gulley Wow.. You must not have read the post. I specifically say that you want to get a license. Geez.. People act like getting an RE license is hard. It takes 3 weeks. If you can't accomplish that then don't expect to make it in RE at all.

3 Reply

OP

Real Estate Broker · Indianapolis, IN · Member since 2009 · 575 posts · 496 votes

@Jay Hinrichs

I was going to say... Everyone is ok wholesaling with out a license but people get fired up over renting houses. Yeesh... as Ive said over and over... GET A LICENSE. Its not hard to do...

James Wise

Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes

Lots of comments about O.P violating RE licensing.

When I was reading through it I was thinking the same thing, but later in the comment the O.P. DOES touch on how you will need to be licensed to do this.

Great advice. just worded a little goofy.

Account Closed

Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes

The idea that someone with no money (as suggested in the first line) could do this is spin. The thread eventually reveals that you will need to be licensed in most states. Licensing costs money.

There are lots of ways to get started in REI. Leasing is certainly a valid one. But not too many ways that don't require money and time and/or training.

How about starting a discussion that leaves out the little or no money angle. See what kind of attention it gets if you lead off with: For those of you who want to get into real estate, are are willing to study for the RE exam and have $500 for training/licensing, this post is for you.

Bill Gulley

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

Well, Ryan got my vote after that one, point was getting a license wasn't hammered away in the post I quoted.

We had an office here that tried that, claimed they weren't a PM, just matching renters to landlords.......well, they got hammered! It's the negotiation, showing, accepting applications, executing a lease one of these or all is a function of a licensee. Here, there is no exemption and I doubt many states have exemptions as to leasing, other than being an employee. They now have a RE broker's license.

And, if a PM company is going to sub-contract their services, you can bet they won't pay more than what they would normally collect, that makes getting clients harder for them and I'll bet too they expect a slice of that pie. So, working with another PM might make some money, how much I would think wouldn't be worth the brain damage as a sub.

So, yes, absolutely, get a license and have at it. If you get a license, a broker's license or work under a broker/PM, and you go to all that trouble and expense I'll bet it won't be long before you're doing something else rather than wholesaling properties or leases. :)

Mary B.

Real Estate Investor · Lansdowne, PA · Member since 2013 · 1k+ posts · 656 votes

Sounds like another version of wholesaling to me. Only instead of flipping contracts for pay you're flipping would-be tenants/people for pay. Sort of like a pimp.... but you didn't hear it from me. ;-)

Kudos,

Mary

3 Reply

OP

Real Estate Broker · Indianapolis, IN · Member since 2009 · 575 posts · 496 votes

Originally posted by @Account Closed:

The idea that someone with no money (as suggested in the first line) could do this is spin. The thread eventually reveals that you will need to be licensed in most states. Licensing costs money.

There are lots of ways to get started in REI. Leasing is certainly a valid one. But not too many ways that don't require money and time and/or training.

How about starting a discussion that leaves out the little or no money angle. See what kind of attention it gets if you lead off with: For those of you who want to get into real estate, are are willing to study for the RE exam and have $500 for training/licensing, this post is for you.

Use a credit card, find a broker to partner with, get a loan from your uncle... c'mon..

The post was meant for newbies that want to get in the game. Anything you do in this arena is going to take massive amounts of time and effort. There is no easy way... no free way..

Its like when wholesalers are trying to get started and they "don't have any money for marketing..." its just an EXCUSE to do nothing. ...Not buying it.

3 Reply

OP

Real Estate Broker · Indianapolis, IN · Member since 2009 · 575 posts · 496 votes

Originally posted by @Mary B.:

Sounds like another version of wholesaling to me. Only instead of flipping contracts for pay you're flipping would-be tenants/people for pay. Sort of like a pimp.... but you didn't hear it from me. ;-)

Kudos,

Mary

Kind of like wholesaling... yes.. pimping.. not so much LOL.. Love it tho!

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

@Bill Gulley

Bill I get what your saying ... however you can lease properties as an employee of a company that owns the asset... You cannot lease properties for a PM as you state that's correct,,, need license for that in virtually every state.

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