All Forum Posts by: Danger Brown

 I would suggest that you start by networking with some wholesalers in your area. They will have buyers lists already. They will also have all the paperwork and local laws figured out. You can get started without knowing how everything works. They might ask you to put up bandit signs for them, or any number of other tasks.

Try meetup.com for local real estate investor meetups to meet some people. There will probably be several every month. Just show up and tell people you are eager to help make things happen and ask them if there is anything you can do to help them in their business. If you struggle to make connections and people are clearing out, wait around for an opportunity to speak with the organizer who will be the last one out the door. Ask them to tell you who you should be talking to. They will know the players.

Don't worry, they will be very happy to give you a fair piece of any deal you actually help with. This could be a pretty fast way to start putting a few bucks in your pocket and you will learn along the way. 

You can also learn some stuff and make some extra money by managing 1 or more properties for other investors. There are LOTS of landlords who don't want to deal with their own properties.

I don't really agree with the get a 2nd (or better) job plan. I haven't had a job in 12 years and wouldn't ever seek one unless it was an apprenticeship of sorts.

I understand keeping a job if you love it, or feel safe that way... or until the real estate business replaces it. BUT, I say this:

If you want to be a real estate investor, BE a real estate investor. Work for your paycheck while you have to, but if you need extra money, take a 2nd job working for a  real estate investor. Bird dog, drive for dollars, help them in their business so you can learn and make extra money along the way.

Or just do it for yourself. Start wholesaling in your spare time. Use wholesaling profits to make your own investments or scale up.
Or, if you are job minded but want to learn real estate investing, work towards becoming a commercial real estate broker or other player in the industry.

The banker is speaking from his perspective. His concern is having a serviceable note with good collateral. The information is probably colored by the mortgage meltdown and possibly by housing prices being potentially overpriced with risk of a correction. 

He is not wrong from his perspective which also assumes that an asset will be leveraged. Depending on the market, many types of housing are in a position exposing them to at least a temporary correction in market value. His view is similar to a margin call in a declining stock market. SFR values can swing pretty wide because there are SFR owners who are not investors influencing the market. They can often be too pricey to cash flow well and may have greater downside risk in a general economic downturn.

Even if a landlord is still making payments, the reduced property value reduces the resale value of any debt against it. It also hurts the creditworthiness of the bank which could lead to banking regulators intervening with the banker's portfolio of loans. So even in a case where a landlord would survive a downturn and continue to make all payments, the downturn combined with a leveraged loan could indirectly hurt the bank.

The investor's view should be different. We may have any number of plans for the property. We may have a longer or shorter lense on the future of that particular investment. Just remember to be aware of the situation as it relates to your risk tolerance and objectives... and make your decisions based on your criteria.

@William Yeh I agree with everything you have to say. I did not mean to imply that sellers numbers are always true. Just that the burden of truth is not on the real estate agent/broker's shoulders. I would expect an agent to say "The seller is claiming the following numbers are true...." I would be disappointed if an agent portrayed seller claims as certainties. 

I think we can agree that as long as an agent is acting ethically in properly sharing their knowledge with buyers, they would not be held liable for sellers actions. I realize that my response was abbreviated. I did not intend for it to be a complete description of due diligence responsibilities. 

@Alissa Collins. I'm curious what your husbands name is. Your split test between names is interesting and I wonder if it is a rule or if your husband's name is somehow unappealing. I don't mean to offend. I'm sure he is a wonderful person.

During the due diligence phase the seller will be obligated to provide paperwork proving the income. This may include bank account statements, lease agreements, contracts with service providers (like snow removal or lawn mowing) ....ad infinitum.

 It is reasonable for you to take the numbers at face value. Just make sure they are not pro-forma. Or if they are pro-forma they should be labeled as such and you can provide both sets of numbers. Then once a contract is in place it is the buyer's responsibility to do due diligence where the numbers will be proved out before the checks are signed.

My first wife married the wrong guy. I was born to be an entrepreneur but she just wanted a job with a steady paycheck. Investing in a business or real estate made her EXTREMELY uncomfortable. Although there were other factors like our young age, our disparate views about financial risk were a significant contributing factor in our split. 

Regardless of the level of your spouse's level of involvement, the success of your marriage depends on coming to a working financial agreement between you two. She must at least be informed of risk reward scenarios and be OK with your actions. 

An American would not be annoyed by a New Zealand accent. Many Americans might be impatient with callers for whom English is a second language. We get lots of calls from India, Philippines, Malaysia during the dinner our from people in call centers. It is frequent enough that if an American hears an English as a second language person on the phone it will be instantly assumed to be phone spam of some sort. (This doesn't mean we're prejudiced.)

If I were to hear a caller with a New Zealand accent, I would initially assume them to be calling from within the USA. Some people might not properly identify your accent and think you are Australian or English which is fine. 

If giving your contact information online or in mailings I would recommend having them call an American phone number which can be forwarded to you. Google voice should work for this but I'm sure there are other solutions. Do the same with your fax number if you need one. 

For others who might read this, if you want to do business in the United States from another country you might be interested in using a registered agent service to maintain a legal company here. The company has rights similar to a human in that it can own property and be sued. You can do this in many states and might choose to have the company in the state where you intend to focus your business. If you will operate in multiple states I would consider Wyoming first for basing the LLC. There is no state income tax and they have very good liability protection for LLCs. I also like the estate tax advantages for a "Wyoming Close LLC".

The registered agent service will provide a human presence in the event you receive a notice of legal proceedings which could be hand delivered. They can also receive mail, fax, and phone at an American address which is forwarded to you. For people living outside of the state a registered agent service is a legal requirement. Total cost for LLC and agent would be about $250-$800 per year depending on the state and level of service you expect.

In this situation you could legally tell people that you own/represent/work for a company based out of Wyoming (or any other state). Optionally you can say that you are telecommuting.

From a legal standpoint, people would be dealing with a United States based company.