Rental Property Investor · Mineola, NY · Member since 2014 · 838 posts · 212 votes
10y
@Arthur Fuller II Dont listen to unhelpful people. Take the $300 and mailers are a good option. You have a ton a low cost options also, like driving for dollars, join the local REIA, networking, and educating yourself.
Taking Action and making it happen are what you have to do, it doesn't matter if it is $300 or $3,000,000. How you use your time and money is better then anything.
Thank you for all of your replies. I've done some reading (that I probably should have done before the post) and now know its illegal to post bandit signs in LA. so I've decided on another use for my $300.... I will get a RE license. (Buy the course, and take the test....)
I think it will help immensely in the long run.
Personally I think that is a great choice. It's easier to make money as an agent then Wholesaling if you ask me. Plus it gives you a huge advantage investing.
Specialist · San Francisco, CA · Member since 2013 · 227 posts · 158 votes
10y
@Jay
@Jay Hinrichs I've been doing this for more than 15 years, the exact same way each time, so you calling it ludicrous means you either don't understand what I'm saying or you're just being rude or both but I'll be happy to tell you how I would put a team together with less than $300.
This is for new people getting started who do not already have connections in the area they are planning on investing.
To build a RE team you'll need 3 - 5 people on your team.
The first person I would search for is a good RE attorney in the area that I want to invest. I would call to set an appointment and during the meeting I explain to him my goals, objectives and how I would like to use him in my team (i.e. to review contracts, set up LLCs, etc.). If I feel the attorney and I are on the same page then I put that person on my team. That means when I put together my RE packet, that attorney's name, bio, and contact information is included in my plan when I show it to potential investors.
The same goes for RE CPA. That's two people.
The next person I look for is a great RE agent in the area. Usually I'll attend an investor's meet up or meeting in the area and ask investors who are they using to find their properties or helped them buy properties in the past. They usually are happy to refer their agent new business, so that's pretty easy. I'll contact a few and explain to them what I'm looking for and if there's a good fit, then they're part of my team.
In SF I use bird-dogs because property goes on and off the market quick. So I hire people in the neighborhoods I'm interested in and tell them if they see a house with grass overgrown or looks like it's not being taken care of send me the address and I'll give them some money for the lead and I'll give them more if it becomes a deal. I don't list my bird dogs by name but I do say, I have 5, 10 bird dogs in an area in my plan.
If I have any advisers that means, people who are well known in the area who I've met and talked to and they have agreed to help me then they are listed as an adviser. You can usually meet people willing to help you and be an adviser at local chamber of commerce meetings or investor meet ups.
Once I have these people, I put together my plan. I spell out my goals and objectives, what type of real estate I'm looking for, what are the triggers to buy a property and how will investors exit from a transaction.
I send my plan to all parties to make sure they are comfortable and agree on their roles and then I present it to potential investors.
I can usually find the most willing investors from my advisers or my advisers may know other investors who may be interested.
I honestly think people appreciate knowing what your objectives are, what their role is and who else you are using in a transaction.
How much money does this usually cost me??? Besides dinner or lunch not much. Business cards are nice but not really necessary.
Now tell me again, how ludicrous this is??? Sorry that was rude. That's what I mean by putting together a team.
I hope some new people in RE will go this way more often. Rather than just flying by the seat of their pants and playing catch up as they go. It's a million times better to have your ducks in a row and everyone on the same page and I think their success will come faster this way.
But with 300 . dollars which we are talking about.. Your not going to get an attorney on your team.. their hourly rate is higher than that. so that's a none starter.
Your NOT going to get a RE agent on your team because they will want to prequel you and in SF market which is a million or so pre deal 300.00 is not going to get you very far.
HML in SF will want 20% equity as you know.. and yes you can bird dog and talk to folks and take them to lunch or dinner but after 2 to 5 lunch's of dinner you have now spent your 300.00 dollars.
I grew up in SF peninsula and I started with nothing but I did so as a RE agent living at home with my parents.. LOL... once I got some commissions I was able to move out and I bought my first home in Milpitas in 1975.. that one purchase set my entire life up frankly. But to buy that home I had saved 9k I bought it for 80k 8k down 1k closing cost and 8k from 2nd from HML.. which was common in the day. never looked back.
I stand by my statement that 300 dollars as seed money in the SF market is not realistic in the extreme.
Specialist · San Francisco, CA · Member since 2013 · 227 posts · 158 votes
10y
@Jay Hinrichs I think maybe you've had money for so long you use money as a tool to speed things up. Most people starting out are not in that boat. A lot can get done with good negotiation, networking and being ready to shoot when it's time to pull the trigger.
And did you miss the part about the investors in my plan?
OK so let's walk through a transaction, as if, I were new to an area.
So I've talked to all the people who I want to be on my team. I know what my investors want and the return they are looking for. One of my bird dogs or my agent finds a property on the terms we set out in the plan.
I negotiate with the owner, put down a very small consideration with a contingency that if they approve more will be wired to escrow within 48 hours.
Since my investors have already agreed, if we find this type of property, in this condition then we will put this much down. It's a done deal.
Still not much money involved.
And you're saying a RE agent won't even talk to you unless you preq. I've never had that happen not even in SF market. What I do see is if you are professional, know what you're doing and have your ducks in a row they are willing to work with you as long as they feel you can close. And if they were referred to you from another investor or someone they know they are more willing to work with you.
I'm not buying homes in SF right now and I haven't been in the market for a few years here because it's too hot but I still have never been asked to preq before an agent will even talk to me about a property. But that's my personal experience. I can't say what is true for everyone.
Wholesaler · Beaverton, OR · Member since 2015 · 33 posts · 9 votes
10y
@Jay Hinrichs I'm in Portland, OR and I say it is possible. I personally can attest to it. I started learning about investing in July. I did my first deal in August and lucked up and made 8000 on my first deal. Call it luck but I called a home owner and with biggerpockets.com closed my first deal. last month I decided I would start my own marketing campaign and bring myself more deals. I took my last 300.00 and purchased a list of absentee owner here in Portland Area and mailed out 300 personally signed and stamped letters asking to purchase their property. I recently built a relationship with a RE agent and he will supply a list every month. I knew an attorney very new to the legal field but she passed the bar shes my attorney no fee. Relationships, relationships are key its not always about the money starting out.
Thank you for all of your replies. I've done some reading (that I probably should have done before the post) and now know its illegal to post bandit signs in LA. so I've decided on another use for my $300.... I will get a RE license. (Buy the course, and take the test....)
Real Estate Agent · Kansas City, MO · Member since 2015 · 30 posts · 18 votes
10y
Obviously the ops question is lacking any sort of detail. We either have money or time and $300 is not much money. Rather than focus on having $300 to put towards REI it seems like a more wise decision to put your time towards networking with people that will help you meet your goals. Without a real plan in place you'll end up burning up $300 dollars very quickly and be right back to square 1.
Real Estate Investor · Los Angeles, CA · Member since 2015 · 112 posts · 31 votes
10y
update: I spent more than $300 :-)
I spent almost $600 on a direct mail campaign with Jerry Pucketts Market like a Wholesaler company.
I spent $250 on my RE Licence course. With an elective of Appraisals - hoping that will give me some added help assessing the true value of the homes I will be flipping.
