All Forum Posts by: Brian Alfaro

@Mark Sewell I'll send you a PM!

Hello BP!

I am looking for a business partner in the Houston area who wants to build a long-term, mutually beneficial relationship. I am in the process of starting a company that does a little bit of everything - Flips, Buy & Hold Rentals (for myself and anyone involved), and Wholesaling if needed if we have too many leads (good problem to have). 

My goal is to build a company with a main focus of finding off-market deals, acquiring them, then deciding what the best strategy is for the property. Is it a flip, is it a buy & hold for someone in our company, is it something we assign to another investor, or do we simply list the property on the MLS? I want us to be flexible to have multiple strategies and tools in our belt to use. My main motivation for starting this, beyond being passionate about starting companies and building things with others, has to do with the challenges I've ran into finding ACTUAL good deals in this market. I decided it was time to find my own deals.

I know what my skills are, so I am looking for one or two partners to fill the gaps in the following areas:

- Sales - Someone who has the TIME and CONFIDENCE to cold call, door knock, and meet with sellers to get deals closed. I want our company to put helping people first, so someone who isn't afraid to speak our vision into existence by executing. 

- Private Money - Someone interested in making a financial investment that can help throw gasoline on efforts. This mostly means money to be used for marketing, closing deals, and rehab projects. 

Please note that on the sales side, I am preferably looking for someone who's willing to commit a lot of time if not all (full time) of their time to this. I manage other businesses, so that is why I am looking for someone who can commit their time in return for an equity partnership. I, of course, will put my head down and work when possible too. 

I could write a 5 page essay on here about what I'm trying to accomplish and why and how I see it happening, but I'll save my pitch for those interested. If you're just getting started or have been trying to get started with no success, reach out and we can see if our goals and personalities match for us to do business together. If you're experienced and have some advice/recommendations or want to find out more about being a private capital partner, please feel free to reach out as well. I'd prefer to partner with someone more experienced than I, but I am not against working with someone who's inexperienced but has put in the time and effort to learn and brings knowledge & hustle to the table. 

I look forward to seeing what's out there! 

Welcome to BP! @Bianca Navalta

I’ll reach out so we can connect! 

@Sandi L Williams Just PMed you! 

@Care Peel

Care, unfortunately that’s the risk when working with a wholesaler you don’t have a relationship with. If it was a wholesaler you’ve bought lots of properties from and they know you’re good for it, they’ll allow you potentially to do a QUICK “inspection” on it before they pass it on to others on their buyers list. It’s because you have a relationship with them. Since you’re new, you aren’t likely to find a wholesaler that’ll let you do an actual inspection on the property. A walkthrough with a contractor so you can have an accurate rehab cost, sure, but not an inspection. However, it never hurts to ask. Worst case scenario they tell you no and you’re right where you started.

That’s the risk and why it is so discounted. It’s not a traditional retail purchase. It’s an investment and therefore involves certain amounts of risk in certain areas. This is one of them.

Beyond a walk through with a contractor, what kind of inspection are you talking about?

@Michael Ashley

Just an FYI lease options in Texas are borderline illegal and something I would avoid due to all the red tape. The max length of time on one is 180 days, so unless you have someone who will qualify for a loan in 6 months, you’re violating Dodd Frank Law.

Best option is to seller finance it here in Houston. Take 15-20% up front, set your terms (shorter than your terms buying owner finance) and move forward. You’ll get a large upfront payday, cash flow monthly, amortize the original loan, hopefully appreciation, and you don’t have to deal with being a landlord.

Here’s a good link that can explain lease options in Texas and why to avoid them:

https://www.lonestarlandlaw.com/Lease-Options.html

@Mark Sewell @Shahriar Khan @Jay Hinrichs

Thanks for the detailed replies! I’m with you, Mark. I see benefits being new and using a HM lender, even though they’re expensive, as a second set of eyes to guide me. I do plan on attending the Quest events here in town soon, so hopefully I can make some contacts or at the very least learn something.

As far as private money goes, the info you two shared is very useful in helping me understand what I should be looking for and willing to offer to a PM partner. I guess I should have clarified that, but my goal is to find a PM partner who has been in my situation before but worked their way up and out of doing the things you mentioned - running comps, dealing with rehabs, etc. Having this type of person serve as funding but also a business partner that can provided some guidance when I stumble is more than worth giving up big pieces of the pie at first until I gain more experience and the collateral gets better (due to getting more experienced finding good deals) and the security does too (due to trust, successful deals that are returning a profit for both of us). I’m not looking for hand holding because I know these people have full time gigs and are looking for PASSIVE investments, but having access to them regularly if deals come through or guidance is needed on a very specific area.

I'm with you Jay - I see the most successful investors in our town always have their license. Seems to open doors that can't or are much harder to open without it. Too many benefits not to have it. That's why I'm currently working on getting mines as well. I'm excited about getting a peak "behind the curtain" and bringing investment knowledge as a benefit to those who need to buy or sell. Our market is so dang hot right now, your best bet is usually listing properties on the MLS and letting the thousands of investors skimming it hourly for deals bid up the price. This can be an easy way to help homeowners and make a listing fee without worrying about lenders. In & Out while building a great reputation and helping your client and customer.

@Aaron Pfeffer - Great tip! Thanks for sharing. I actually was recently told about this strategy too. Skimming through deeds can be a part time job, but I’m guessing it’s worth it to find a true private money partner.

@George A. Douty II

Thanks for sharing your experiences and tips, George! I’ll keep your info handy in case I come up short somewhere. I am 100% of the same mindset - a % of something is better than 100% of nothing.

Hello BP!

I am curious to hear everyone's feedback/advice on where they found PRIVATE money to do their deals (not hard money). I am currently in the process of starting my acquisitions side of my business that will be reaching out to sellers here in the Houston area, so I thought it'd be a good idea to see how others have formed relationships with private lenders to fund their flips, buy & holds, subject to rehabs, transaction costs, etc.. There's a large enough pie to share with others in these types of transactions, so finding someone who wants to build a relationship and benefit from helping each other is something I'm going to continue to look for.

I have pre-approval from a few hard money lenders in Houston, but as everyone knows a newbie isn't going to be getting favorable terms. I am getting 12%+ rates, 3-4 points, and seeing $2,500+ in fees up front plus all the stuff they charge for like draw fees. On top of six months of reserves and funds to kick-start a rehab, I need to have about $25-30k in the bank for every $100k borrowed. This has slowed down my ability to aggressively pursue deals in this market that is HOT; if they're not JUST RIGHT, the deal doesn't work for me. Sometimes I'm short just a few grand to do a deal. Definitely frustrating. 

Considering I have some cash, my team lined up (realtor, title company, vetted GCs and some subs for getting bids, RE Lawyer, etc), and am getting close to launching my campaign to reach out to sellers, the only thing I am constantly thinking about, which I'm sure is common for a lot of investors, is "where do I find money to throw gasoline on this fire?"

Everyone says there's a lot of money out there looking for a place to park itself & grow, but I must not be looking in the right places yet! Some people have suggested going to meetings where self-directed IRA people are hanging out, but that's probably the only strategy I've heard. Is everyone just using hard money and living with all the fees?

I look forward to everyone's responses and thanks in advance to all those who reply.