Details of the First Deal?

Question

Hello all! I have been a lurker for a few months now and now I want to start taking some action! My name is JD and I am excited to begin investing in Real Estate. I am a native Rochesterian and I want to start my buy and hold Real Estate portfolio. After doing a bit of research I want to look into the 19th ward, East Rochester, and potentially the Swillburg neighborhoods. I feel like starting in these areas would be best. My plan right now is to pay off my last student debt by December, and then begin the process of acquiring my first property in the spring of next year. I feel a bit overwhelmed, mostly by the finding of deals, as loopnet and the MLS don't seem to list real deals. This makes sense, good deals won't be delivered to my fingertips I figure.

So that leaves my biggest question right now. How did you find your first deal? How did you finance your first deal? Can I just go to the bank and ask for a real estate investment mortgage? Is that a thing?

Any advice would be great. looking forward to connecting with everyone in Rochester!

So that leaves my biggest question right now. How did you find your first deal? How did you finance your first deal? Can I just go to the bank and ask for a real estate investment mortgage? Is that a thing?

Any advice would be great. looking forward to connecting with everyone in Rochester!

Nye Eddings · Answer

@JD DiGiacomandrea

We have all been there at one point or the other.  I was just there 8 months ago and now I am looking for my second house as we speak.  Te point of it all is just to pull the trigger.  I wrote a detailed post for people in your exact situation because I was SO CONFUSED with all of the info on this website.  The more experience you obtain in RE..the more you realize you dont know.  Hopefully my link to my detailed process will help with some anxiety:..... My process to help with your first deal anxiety

Account Closed · Answer

You may want to start with understanding what a good deal is. Maybe you want to stop looking for deals and try searching for transactions.

I always favor cash flow or equity!  In the beginning of negotiations I am less concerned with what holds the building together, but acutely concerned with the problem and which proposal I am going to offer.

Cash Flow or Equity makes a good transaction. Too many people who call themselves wholesalers or investors take too much time looking at properties trying to make the BIG DEAL. The deal is with the seller, the building is the vehicle to a profit.

Profits starts not with the building, but with the ownership, existing financing and all the issues the seller is having with the property. For this reason I believe it is difficult to create a transaction when you are separated by an agent or any third party from the seller. If we can't counsel with sellers, eye to eye or ear to ear, our chances are less in creating that desired profit.

You have the power to control real estate with a piece of paper with words on it  providing you know what words to use and now to connect them.

Understanding formulas and clauses is important to the success and growth of an investor.

Having a number of ways to control real estate makes the task of profiting in this business less stressful.

Not buying but Controlling real estate (houses, commercial, land and non-conforming properties) has always been the best way with the highest leverage possible in putting the numbers together in your favor. It is amazing how little it takes to Control so much.

Some of the words and concepts that can be used when trying to create that great transaction-----

• Right of possession
• Delayed settlement
• Check funds
• Contract candy - buyer incentives 
• Meeting of minds
• Banking days
• Assignment 
• Release of liability 
• Hybrid offer
• Absolute auction
• Subordination 
• Stutter clause
• Substitution of collateral 
• Principal mortgage
• Right of first refusal
• Split notes
• Chattels for deposit and trade
• Front porch clause
• Seller participation 
• Bidder buyers bonus 
• Tax deferred
• Piggy back transaction 
• Seller refi for take over
• Short joint venture 
• Option buy back

Creating financing works better than conventional financing all of the time.

One of my favorite formula is Control & Roll - a method of Contolling real estate with a skinny contract offer and fast turn over for a cash profit.

JD --- I hope some of these ideas will help you in search for profits.

Charlie

JD DiGiacomandrea · Answer

Thanks all for the great feedback! It's been an exciting year and I'm much closer to getting that first deal. Reading all your stories has been pretty inspiring, and I've certainly fell victim to a little analysis paralysis over the past year.

Now I've done my research and I've decided that I'm very interested in the Southwedge, Swillburg, Monroe Ave neighborhoods, and also the Merchants/Culver and a little of the Beechwood neighborhood. I've also decided that 2-4 family seems to make the most sense to me right now.

The MLS seems to have some deals on it every now and then. I think that there are other ways to source deals though, there must be. That is kind of the next part of my process (I'm very process oriented as a person). Are there any good wholesalers, or people to connect with in Rochester to work opportunities. Any ideas?

JD DiGiacomandrea · Answer

So I figure I would pop in an update here. I haven't done my first deal yet. What I have done in the past year or so is get my DBA up and running, I ran a small pumpkin road side stand off my yard in October and absolutely fell in love with the passive income stream. Granted I didn't make all that much money, I did use it as an excuse to setup my DBA, my business banking account, and name my company.

Just this Friday I finally toured my first two properties. It was exciting and eye opening. I also found a few wholesale lists I have been added too and I've reviewed a few properties through them. I am getting closer and closer to putting that first offer out there, and maybe after a bunch of those I'll get that first deal in the bag.

Thank you to everyone who shared the details of their first deals. Its very inspiring!

Martin Grizzanti · Answer

Did you end up doing a deal?

Jerry Padilla · Answer

Thanks  @Mark Updegraff

@JD DiGiacomandrea - Please let me know if i can answer any questions for you

Mark Updegraff · Answer

Found my first deal on the MLS in January (great time to be looking as winter has crushed the seller's spirits before the spring market arrives).

Bank Financed it with BoA 10% down (BoA was a nightmare to deal with)

I recommend MB financial for local investors:  @Jerry Padilla has your back there.

They don't have a seasoning requirement on rental income and you can get 2% seller's concessions on a multi.

Details of the First Deal?

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