All Forum Posts by: Brian Burke

Blackstone is buying everything below $300K in Sacramento, which doesn't leave much left over for individual home buyers and small investors, so there is a high concentration of offers for what little product there is. They will slow down soon, but it wouldn't be surprising if another group comes in when Blackstone starts to back off.

There are still deals to be had in Sacramento, you just have to out-maneuver the big guys. It's not as easy as it was last year, buy I'm getting some deal flow there despite the competition. If you are flipping, you'll have to increase your price bracket above the low end where the buy & hold guys play.

Hi Jeff! Welcome to BP. I'm not too far away from you and I also operate in the Sacramento region and starting to do a little up in your area...just bought a house in Wheatland. I was in law enforcement and was a firefighter/EMT many years ago when I used to work for a living. Nowadays I fly helicopters for fun. Sounds like we have a lot in common! Did your company just get bought?

Steven, I buy about 10 to 15 houses per month. I don't have time to go out and market and do all of that stuff. I also don't have a lot of time to spend analyzing any one deal. If a wholesaler comes to me with a deal that I can make money on, I don't have time to find ways to scheme around them, and I don't care that they are making money. I don't say all of this stuff to toot my own horn, I say it because it is important for you to understand what is going on in the mind of your buyer. If that is not the mindset of your buyer, you might be dealing with the wrong buyer.

Brandon nailed it, what he said is exactly right.

I've heard of Tiger 21 and think it is a cool concept. I'd be interested in participating in a BP "power investor" group, but I think that the challenge faced by those of us that are very high volume investors is lack of time to coordinate it ourselves. Putting together such a group takes a commitment of time to conduct all of the needed tasks to put such a thing together, and to make matters worse, gathering up high volume investors at the same place and time is like herding cats.

Ben, I'm not smarter than Brandon, but have you seen this thread: http://www.biggerpockets.com/forums/51/topics/79659

I don't know if that answers your question, but I think it might. Let me know if I can fill in any gaps.

If the investor is family, proof is easy. If friend or colleague, some type of documentation as to when and how you met might do it. You are limited to 35 or fewer unaccredited investors so you are probably right that accreditation doesn't matter as long as you stay under the limit. There might also be other requirements, and your attorney can let you know if there are. A good, experienced, business attorney should be able to help you, until you grow bigger and start getting more investors. At that point you will be well served to employ a specialist in securities transactions.

Welcome to BP, Anthony. Good for you to get such an energetic start! I'm not in your area so I'm no help to you, but your story reminds me of me, 23 years ago. Good luck! The world awaits you.

I don't have a strong opinion on this either way, but if you do calculate your assignment fee as some percentage of profit, you'd better very clearly define "profit" ahead of time. There are so many opinions on this, and you wouldn't want to be in a dispute later over what the actual amount should be.

Is profit sales price minus purchase price? Minus rehab also? Minus sales commission? Should a maximum commission be set? What if the rehabber is a broker and pays them self a commission? Fair game? What happens if they overspend on the rehab because they don't know what they are doing? Is that OK, or are you going to be upset that your fee went down due to their incompetence? What about financing cost? Should you pay the price when they get the benefit of leverage versus a cash buyer that doesn't have interest expenses reducing their "profit"?

There is nothing wrong with getting a percentage of profit, just be sure everyone is clear on one thing...a percentage of WHAT?

Nick, any time you have investors in a deal, and they don't have an element of control (such as being on title with you), their investment is dependent upon the success of your efforts. This means that their investment is the purchase of a security and subject to the securities act of 1933.

This is not the kiss of death however. There are exemptions in the act that allow the sale of securities without registering as a publicly traded security. One example is through a private offering in compliance with regulation D.

Another example is doing a deal with 35 or fewer investors with whom you have a pre-existing personal or business relationship and you have not done any general solicitation (advertising). It sounds like your example might fit into this category. In this case, the investors don't have to be accredited.

There is a very simple solution when you are lost in the very complicated world of securities laws: go visit an attorney, describe exactly what you intend to do, and follow the attorney's instructions carefully. I am not an attorney, so take everything I said for what it is: an opinion, not legal advice.

I wouldn't want to do it WITHOUT a property manager! When I first started, I did it myself. After a while, I realized that life had a lot more to offer than managing tenants. If you have a small number of properties in your local area, you can likely handle it. If you want to grow larger, you'll want the help.