Marketing or Realtor?

Question

From what I can tell it seems that most folks in RE investing are ultimately after buy and hold.

I've listened to the podcasts with Anson Young who gets many of his deals off of the MLS, and Sam Craven and Aaron Mazrillo who are wholesalers and today I hear Kenny Estes' podcast that suggests that I shouldn't invest (as a newbie) until I've saved $50k...  I would appreciate some direction:  If the goal is to buy and hold what is the best way to get there?  Is it necessary to market with (yellow) letters and postcards or is it better to find an agent and put them on the hunt?  I'm interested in the most direct route.  Maybe the answer is both?  Any comments would be appreciated!

Joe Delia · Answer

Some may, but most don't. You'd be surprised most people want to see others do well and are willing to share people.

Gary Kurtz · Answer

@Joe Delia You make an excellent point - I do need to know a deal when I see one and be able to execute once there.  I find it amazing that anyone would want to share their contact list with me??  I would think they would view me as a competitor!

@Karen Margrave Thank you for the wise advice.  We have an upcoming meeting in two weeks and I plan on being there.  I was on the fence about it but not now.  I have a lot to learn - I don't even know how to gauge what shape our market is in!

@Mat  Lewczenko  Thanks Mat, It seems the learning curve is huge.  I think if I could figure out my niche to get to buy and hold, and then just "do it" (all that that entails) consistently, I will be an old pro at it at some point.  I don't know what your niche is but I have a friend who has a house in Grandview that he can't sell (not sure why) but if you're interested I can put you two in touch...

Mat Lewczenko · Answer

There really is no downside to having an agent help you in your search early on, BUT, you do need clear guidelines as to what YOU consider a deal, i.e. cash on cash returns, total return, target rents, exit strategies etc. If you don't know exactly what you are looking for then you will find it every time. If the property is already on MLS then the seller already has your agent's compensation figured in, and no, going directly to listing agent will not get you a better deal most of the time, the listing agent usually just double dips on the commission and their fiduciary is to the seller, so don't look for much help from them other than what they are required to provide you by law.

Check around, see what agents are helping other investors, talk to them, lunches work great :) there are good and bad agents for sure.

Joining a REIA is a good idea, if you haven't done so already.

Karen Margrave · Answer

@Gary Kurtz as Joe Delia suggested, going to some REI meetings in your area would be a good idea. There's a saying "all real estate is local" and it's true. What the best route for you to get to where your goal is will depend on your local market.

If you are in a tight market, every agent in town is looking for the same crumbs for their clients. You need to find properties before they are listed. On the other hand, if your area is still over run with REO's, or other properties that are in some way depressed, and listed, use an agent.

Personally speaking we build new construction, as the area where we live is rebounding and prices are going up. The economy is strong here in Orange County, so competition for the few bargains is fierce!

Joe Delia · Answer

Would you know what questions to ask after a yellow letter campaign? If you had a deal smack you in the face would you be able to execute?

My suggestion would be join a reia, get to know people, and have a fellow investor help you some. From there s/he should have a solid contact list to start you out with.  In turn for him/her, you can buy food, if your profession benefits him offer him/her services for free in return.