All Forum Posts by: Christopher Parsons

@Nicholas Monroe first off, awesome way to start out with real estate investing. As for building a buyers list, what I'd recommend is hunt down all the flippers in your area. Look up "We buy homes cash [your city]" and phrases like that and you'll find a mix of flippers and wholesalers. Call them and have a conversation and figure out if what you're looking to provide will be a good fit for them. Make an excel sheet and gather information similar to:

Where do you like to buy/where do you avoid?

What is the price range you're usually looking for?

Do you normally look for standard rehab, or do you look for build out potentials too?

What type of house do you usually go for (2 bed, 1 bath)?

How many square feet do you like to work with?

How many projects do they do in a year?

Best way to contact them?

If you're able to do that, then you'll have a pretty solid start for a buyers list and will be able to provide better targeted properties. Some of these flippers are on wholesaler's lists and just get bombarded with tons of deals that don't meet their criteria. But, if you can be the wholesaler that only sends deals that meet your criteria, you'll build a much better relationship with your buyers and have a bit more success.

Another way to find buyers is on Facebook. A lot of areas have investor groups for the bigger cities or states. I'm on one for Washington State and I see wholesalers post their deals there all the time. Those are usually great places where if you join, you can introduce yourself, mention you're new to wholesaling and would like to get in contact with buyers to see what they're looking for. People will usually comment with their email address, then all you need to do is email them with those questions and if they respond, add them to your list.

Hope all this helps, happy hunting!

@Aaron Macken if you can nail down how to reach people who are in the pre-foreclosure process, probate, tax delinquent, or any of those sort of situations, you'll have a lot more potential to find a great deal. The problem with zillow, realtor, and redfin is that everyone can see those deals. Thats not to say you can't find a good opportunity, but you competing with both investors and people who are just looking for somewhere to live. Not to mention if the house is being represented by an agent, that agent is probably going to try to get the best price possible for their seller.

Are you looking to wholesale? Flip? Whats your strategy? If your main purpose is to get the best deal possible, you should probably look into strategies that wholesalers tend to you. Propelio Academy has a pretty good free course on that, plus BiggerPockets has all the resources you'd need on how to set up a mail campaign and whatnot.

@Reyna Montoya It really depends on your situation. Do you currently have a decent to well paying job? My wife and I live in the Seattle area and its just too expensive for us up here to take advantage of house hacking (not that we couldn't figure out how to be profitable, we just don't qualify for anything around us). We have started taking advantage of the BRRRR strategy out of state while renting our own place here. Our income goes a lot further in other states and we found a cheap place to rent in comparison to what we'd be paying on a mortgage.

We're also tied down by my wife's job and the fact that we have kids. If you're still young, not bound by a job or other responsibilities, then I would suggest you listen to episode 392 of the Bigger Pockets podcast. Great episode on the potential of house hacking and renting room by room. You'd just want to make sure to research the heck out of your market whether you decided to stay local or move. 

I would read Crushing It in Apartments and Commercial Real Estate. I'm about half way through and its been an awesome read. I live up in Edmonds and am in the process of doing my 2nd BRRRR deal in the residential space and my wife and I are looking to move on to the commercial space. You'll probably want to look into Owner Financing strategies as well as how to build business credit and how to raise private money depending on how big you want to go. Let me know if you ever want to set some time to sit down and meet since we live in the same general area. @John Vela

@Ricardo Romero welcome to the BP family. Great community here full of amazing people who want to help. Looking forward to seeing some of your projects!

@Scott Goodson first, ask whichever company who has your money if they are participating in the CARES act and if your account qualifies. My wife has a 401a and 403b, both of which are in Fidelity. We were looking to take a loan out again her retirement which under CARES is supposed to be 100% up to 100k. They said they would only do the standard 50% up to 50k, even though I was directly effected by COVID (I coach boxing and muay thai, gyms were the first places shutdown here in WA).

We consulted with an attorney who specializes in Self Direct and retirement accounts. He said they can choose not to participate in the CARES act, even if its kind of messed up to not offer that on their end. He did also mention that it was probably a company decision that my wife's employer more than likely made and not necessarily Fidelity's decision.

Also, they, if they do participate in the CARES act, they may ask if you were directly impacted by COVID in one way or another.

@Noe Guzman I would start by asking yourself what you want to do. No matter what, you'll either have to pay in time or money. Does that mean you'll get a decent or high paying job to take and invest in passive income? Would you rather learn the ropes of the investor world and create a step up type plan?

The way I've decided to start is to make my money by learning the entire process while getting paid (and I would give anything to go back in time, smack myself in the face, and given my prior self my current gameplan). So what that means to me is I want to get real efficient at BRRRRs for passive income and doing flips for active income. Well, with someone with little to no money, you can't really flip too efficiently, so I'm going to start with the beginning of any deal, and thats finding the deals. So, I am wholesaling locally to not just get paid from my wholesale deals, but to also learn the most efficient ways to find deals myself. Then, as I grow my capital, I can start to look at doing the occasional flip to increase that capital. That way too, you can pull from your own wholesale deals rather than paying someone else for the deal they found (nothing wrong with that if you have the money). From there, I'll basically move to a point where I can look at any deal I have on my plate and choose what I want to do with it. Do I make quick money and wholesale? Is there enough room to make a big profit if I flip? Am I in a good enough area and can rehab enough equity into the deal to BRRRR it?

Now, I'm a little lucky in that my wife has an awesome job that pays decent in Seattle, which means her income can go a long way in the Midwest, so we are already starting BRRRRs out of state. Part of our goal is to retire her in 3 to 5 years, so I am taking the time and found a mentor to start off in wholesaling locally so that I can boost our buying power. I am doing the same step up plan now as I would've done if I had this knowledge when I was 17/18. Wholesale to get good at finding deals, flip to get good at rehabs and increase capital, BRRRRs to build long term wealth and eventual financial freedom before I'm too old to travel the world and do what I want to do with my family.

Oh, and don't forget to take advantage of house hacking while you're still young. We plan to do that as well, but we have a 18 month old daughter and we have a little boy on the way. We'll have to do multi-family style house hacking. Listen to episode 392 of BP Podcast to get an awesome idea for a room by room house hack.

@Gil Keren find an awesome deal finder in that area, either wholesaler or realtor who understands what investors are looking for. Negotiate, do the best you can to see the inside of the property (my wholesaler video calls me and walks me through the property that day) and put it under contract asap, all you really need is earnest money. Now, if you're looking to close in 1 to 2 days, your best bet is private money or having a large enough line of credit (such as a HELOC). Otherwise, if you're working with a Hard Money lender, they're going to want paperwork to get you a loan and that can take a few days of going back and forth. My wife and I live in Seattle and invest our BRRRRs in Texas. We had to print, sign, and notarize a good amount of paperwork before we were able to close. I want to say it only took 5 business days, but to be fair, we also didn't have all our bank statements and paystubs prepared, so make sure you have that information ahead of time.

Remember, the benefits of a wholesaler is they tend to find off market deals that might not even be on the MLS, so you're only real competition is that wholesaler's buyers list. The downside though is the information isn't always 100% correct and sometimes numbers are estimated. Also take any sort of estimated rehab with a grain of salt. At the very least, price out your materials ahead of time. We created a mid-tier rental and a high end rental list and picked out top 3 for each of those within each category. For example, we have 3 different floor options if we're looking to rehab to our C+ to B rentals and we have 3 other floor options for anything that is B+ and higher. If you can go one step further and find out the typical install rate for those items in your market, thats even better. The more systems you have in play, the quicker you can assess and make decisions. Plus, it helps keep you accountable to your standards. Another example, a wholesaler might go for cheapest flooring possible at $.49 a square foot, but thats going to be cheap vinyl rolls. You might decide that the cheapest option you want to provide to your tenants are vinyl planks, most of which I found at about $1 a square foot on the low end and $3 a square foot on the high end. If you budget for your wholesaler's (or other deal finder) estimate in that case, you'll have to choose between lowering your standards, or going over your budget that you planned.

@Bryan Malone definitely check out David Greene's book on Long Distance investing as other have mentioned. My wife and I actually just started looking for our first BRRRR this past July. We came in with 30k initially, only had to bring 18k to the table after 20% down and closing costs with private lender. We kept our rehab to just under 12k, so finding something for 50k is definitely doable.

Main thing is, make sure you're educated in whatever strategy you choose and as David points out in his book, build a solid team. We found an awesome wholesaler who is also a good friend. He's helped me build out my team and manage rehab from out of state (our property is in Texas, we live in Seattle area). Because of him, we're actually getting into our 2nd BRRRR in a week or 2, which is a duplex. Because of his connections, we found a lender that will cover 100% of the property plus rehab up to 70% LTV, so we'll just have to pay closing costs out of pocket, which should only be $2,450 or something like that. We will have to pay for parts of the rehab out of pocket upfront, but will be reimbursed in draws and our estimated rehab is 9.5k on the low end and 15k on the high end.

Went a little off topic there, the main thing is, the deals are out there, you just have to make sure you're as educated as possible and that you start building relationships to form your team.

@Janyl Ventura Mark Kohler has some great advice for free on this on his YouTube channel. From what I understand from a super basic breakdown of his content, passive income should go into a LLC whereas active income (business, wholesaling, flipping, etc) should go into an S-Corp. C-Corp should only be if you plan on taking your business public or if you have major medical issues (I don't remember all the reasoning behind that seeing as it didn't pertain to me). I know he talks about LPs too, but I've really only focused on the LLC and the S-Corp seeing as those are the fields I operate in.