All Forum Posts by: Ivan Guillen

@Shannon Richardson Vet them by asking questions! Here are a few questions I get often when getting screened by a new client:

• 1. How many investments have you closed on this year and month? (not cookie cutter homes in the suburbs, but actual investment properties)
• 2. How many investment properties to you own yourself?
• 3. What value will you provide to my investment experience that, I cant get elsewhere?

Every broker will ask for your criteria, and every broker has access to the MLS. When everyone has access to the same information, you should expect a broker to go the extra mile to get your business.

As far as FSBO, I would just start cold calling! You can definitely get a broker involved, but either you or the seller will have to compensate the broker. Usually sellers will do FSBO to avoid brokerage fees, so it could be up to you to compensate whoever you are working with.

All the best!

Hey @Shannon Richardson congrats on deciding to start your RE investing journey! Not sure where you are looking to invest, but being a broker in Indianapolis and having several connections in the industry we tend to receive a lot of off-market deals to send out to our clients. 

I would recommend working with a true investor friendly broker. Vet them first to make sure they are qualified to assist you on your search, and make sure you guys are a good fit. A broker should be able to facilitate the process, and take some of the weight off your shoulders. Zillow and other online sources can be great as well. Check out the FSBO on Zillow and start giving them calls. Another strategy, is calling "for rent" signs and see if the owner is willing to sell the property. Anything and everything is for sale when negotiated correctly, so don't be afraid to reach out because the worst they can say is "no."

Good luck and wish you the best!

@Hayden W Gibson Nice to see a fellow college student on here! I also have 3 semesters left before I graduate, and the question I think you should ask yourself is: Will you benefit from waiting 1.5 years to start investing, or will that wait actually end up holding you back?

I started investing locally in Indianapolis my sophomore year, and have continued to search for new opportunities since. You should consider doing a deal by yourself, but have a strong team in place to help you along the process (RE broker, PM, contractors). If you are partnering, then make sure your partner(s) bring a value to the table that you could not bring on your own. I've talked about partnerships on here before, so I will link it here so it can provide more clarity.

[Solicitation Removed by Moderators]

All the best!

@Michelle Castaneda Congrats on deciding to invest in RE. I am a native broker/investor in Indianapolis. If you are looking for guidance on your investing journey then feel free to reach out! Our clients range from newbies in the RE industry to seasoned investors that have been in the game for years. We have sold 9 great investment properties so far in 2020, and are very hands on with our clients to meet all their needs!

Good Luck!

@Amanda Galloway Excited for you to be investing in Indianapolis! As far as the east-side goes, due diligence is key in this area. Neighborhoods vary from block to block which can make it risky for OOS investors. You should have a team in place, and they should act as your boots on the ground here in Indy. I agree with you, that your broker is being vague about their opinion surrounding the property. Your broker plays a key role in vetting opportunities that meet your criteria and risk tolerance. You should be able to have full faith in them, and receive straight forward answers since they are more familiar with the area. If this is not the case with your current broker, then creating a team you can count on should be a priority. 

Good luck and congrats on getting started!

Multi-family real estate has become oversaturated, especially in major cities. How is a small investor supposed to compete with large investment firms? The answer is simple, don't look in the same places they are. Major cities all typically have the same problem, there is an undersupply and extremely high demand. Think back to your high school economics class, this scenario causes prices to skyrocket. This tends to weed out the small investor, because there is typically not enough liquidity in their corner. Or the small investor will buy a bad deal because that was the only opportunity remaining in their market.

So how does a driven investor scale out and acquire large multi-family complexes? Stop looking at major cities where large firms are dumping their money. A strategy that my team has taken on is looking into tertiary markets for opportunities. We are all local to Indianapolis, and have noticed unreasonable values placed on Large MF complexes. Since we are still relatively small we looked into markets within 1 hour from the city. This brought 500+ deals to our desks, and we scoped all of them out virtually within a week to ensure they met our criteria. Of those 500+, only ~40 met our criteria desired so we drove out and walked all the complexes. We narrowed these down to 8 properties that seemed most viable, and contacted all the owners.

Currently, we are in talks with an owner and keep looking to move forward with a deal. If we would have looked solely into major cities, then we would have surely been out-offered by any competitor in the area. Tertiary markets are the bread and butter that no one seems to scope out, and allows for more leverage in negotiations on the buyer's behalf.

What markets are you looking into? How do you scope out deals? What are your thoughts on tertiary markets?

Look forward to hearing your thoughts!

As an investor, I have not wrote an offer on a property that I have not walked through. As a broker, I have had clients put in offers on properties that have not visited. This is mainly because they live out-of-state, and rely on me to be their boots on the ground. This is why having a strong team is important, because they can help you complete your due diligence and give new perspectives. 

The job of an investor is to determine the value of an asset, and attempt to acquire it at the lowest price possible. This is how you make money when you buy, instead of waiting until you sell. Offering too low though will likely upset the seller, and tarnish your chances of acquiring the property. It is important to be realistic when making an offer, and not waste anyone's time. 

Since I am local to Indianapolis, and have some investing experience under my belt I am able to help my clients set reasonable valuations on properties. If my client has unrealistic expectations and wants to offer very low, then I am straightforward and tell them the likelihood of their offer getting accepted is probably slim. This gives them reasonable expectations, and if they still want to put an offer in, I am not opposed to writing up a purchase agreement for them. At the end of the day, I could have missed something when evaluating the property, and I always keep their best interest in mind.

Hey, if the seller accepts the offer then its a win for my client and myself!

Leverage is a great multiplier for real estate investing, especially when it comes to multi-family. It allows your cash to go further, and get your debt serviced by monthly rents (when the numbers work).It allows for bigger projects, if you have 250k in cash, you could buy a complex for that amount, but it limits your unit count and cash on cash returns . Instead, you could put that 250k towards a downpayment, and buy a $1M complex with more units. The higher cashflow provided by the extra units can allow to have better management in place, and more cash from rents to complete value-add projects.

Going with that example, with leverage you could multiply your cash by simply adding value, and then selling after a period of time. If the apartment complex that was purchased for $1M is now worth $1.25M then you just doubled your cash since you only had 250k in the property to begin with! 

Leverage can be a powerful tool to grow your portfolio, but should only be used when the numbers make sense!

Good Luck!

As a broker, I can say that dealing with clients, and working through transactions has supplemented my investing knowledge. Having access to the MLS, has allowed me to analyze numerous more deals for my clients and myself. Along with this, I have made several connections with others in the industry. This has allowed me to learn from them, and view deals before they hit the market!

Whether you want to fund other people's investments, or acquire your own assets you should start by doing research. See which method aligns with your goals, and what asset class best fits your style of investing. Listen to podcasts, read books, and continue to research as much as possible. Real Estate investing allows anyone the freedom to invest. Whether you have a lump sum of cash saved, or you have no cash at all, there are ways to finance the assets (through conventional financing or OPM). All it takes is some creativity, and finding the right deal! Keep in mind that 99% of "deals" are not deals, you are looking for the 1% that can give you a solid return. When acquiring a deal, you are usually acquiring a problem and that is where you make your money. Purchase and a good price, and always make sure the numbers work!

Hope this helps you get started! Good Luck!