All Forum Posts by: Daniel Haberkost

Yes, we have an investor that's doing 2 for herself right now and she put 20% down. The downpayment is extremely important because if she falls through or the market drops and she backs out we'll be stuck with it. That's manageable considering the land is free & clear and a significant portion of the duplex is already paid for! 

I haven't done them as specs yet but am in the process of putting that together as well since there is a huge demand for duplexes here. 

@Brett Mason this is a great strategy and I’m doing it here in Colorado, specifically Pueblo West.

The whole city is already subdivided with utilities in place and you can buy lots very cheaply so the numbers pencil out.

If the numbers work in your market and there’s a lack of supply it can be a profitable

option!

@Ryan T. There are two very different strategies you’re talking about here.

Flipping vacant land can be extremely easy and require almost no capital in the right places. I buy parcels for 10 cents on the dollar and sell them on a note to retail buyers. That’s a great strategy for someone who is newer and doesn’t have much money but you need to find the right market for it.

On the other hand, buying parcels and doing the preliminary work to then sell to a large developer can also be extremely profitable BUT requires far more time/effort/knowledge/capital. I haven’t done this personally but have several friends who have/are doing it and they’ve showed me their projects. This sort of strategy is not for a newbie.

Dan

What market are you in? My main business is development and this move works well in certain markets here as the underlying land can be bought very cheaply (and it already has utilities) but in many markets the numbers don't make sense. 

@Jamie Kammers I just think through the consequences of NOT taking action.

If you never get started how do you think you will feel about that 10 years down the road? What happens if you get to old age and allowed fear to stop you from doing anything?

That little thought experiment gets me moving very quickly.

You say you’re worried about the unknown which is ultimately futile because you don’t know what you don’t know. But we DO know what happens if you never take action - regret/frustration/mediocrity/etc

Hopefully that helps,

Dan

 I'd much rather do what you did and start buying immediately than be one of the people who gets stuck in analysis paralysis (I guess a happy medium would be ideal but that's not nearly as fun). 

I bought my first duplex a month after learning about real estate investing while I was still in college. Did I have a clue what I was doing? No. But it was one of the best decisions I've ever made. 

Sounds like you're doing just fine and have likely learned quite a bit. How has the commercial property weathered the virus?

Dan

Conceptually, it's a great idea but you're right that it's very difficult to get all of your money out in practice. Part of the issue may stem from the fact that BP started marketing the idea years ago when the RE market was less hot and it was more viable to get a good enough deal to get all of your money out. I BRRRed a property early this year and ended up leaving a bit of cash in the deal BUT it still worked out much better than if I had just bought a property on market. It's a great concept and I can't really blame them for pushing it as much as they do, it is possible. 

I get your point though, if you listen to too many podcasts or read enough books it's easy to start off thinking you can build a large portfolio without any money (good luck). The reality is, real estate investing is a cash intensive venture and it's best paired with a high paying job or lucrative business. 

Dan 

@Jeffery Hardin I would turn the question on it's head, if you had an established business what would you look for in someone to mentor? 

If you've spent years of time/effort/money to build a business and somebody presumptuously comes to you asking you to "mentor them" (i.e. give them all of you knowledge/wisdom/experience for free), that's probably not going to work. On the other hand, if there's a part of your business you need help in or don't enjoy doing and someone (who knows that they're doing) offers to assist with that task then you'd probably be willing to share some of you knowledge with them. 

Go to your local RE meetups and find a way to be of service to a successful investor and you will be well on your way to having a mentor. Keep in mind it's about establishing a long term relationship, this isn't transactional (unless you're looking to pay for a mentor). 

When I was getting started this is what I did, I found an older investor who was fairly clueless when it came to technology so I helped him in that aspect of his business and he taught me what he knew. We've become friends and do all sorts of deals together now. 

I'm sure you can make the same sort of connections if you try.

-Dan

 Hey Crystal, I quit my job and jumped in to RE full time just over a year ago and it was most definitely nerve racking at first. For me, it was capitalizing on what I'm good at and I've found my niche in development/land investing which go hand-in-hand. 

What are you good at and what experience do you have? There are a multitude of ways to make money in the RE world, I would focus on picking one based on your skillset!

Dan
 

 An investor here in town who I met at a local RE meetup began selling a coaching program for his land business. I already have a development business which starts with finding the right land and saw an opportunity to create additional income without significantly more effort. It was an ideal ancillary business.

Plus, I'd known the guy for several years and he'd helped me for free many times so I knew/trusted him. So, I paid him to teach me his land business and it was a great decision. It's very complimentary to what I'm already doing and creates small monthly payments for me in the form of notes whereas my development yields large payouts at the end of projects. 

Spending a few grand shortened the learning curve dramatically and he's now a resource for any questions I may have on land (or any aspect of RE).