All Forum Posts by: Jonathan Greene

Batch-SMS is a terrible strategy and everyone hates it when they receive it. The only way that text messaging works for sellers is after you have confirmed that they are ok to receive text messages in lieu of calls. Everyone knows a BS mass text these days. Do not waste your time. Texting should be a communicative thing for sellers you have a relationship with. Do you know anyone who got a blind text and responded? I didn't think so.

Every day in the forums it's the same thing. "I'm just getting started and I've analyzed a ton of deals (never seen any in real life) in several markets that are nowhere near where I live because where I live there aren't any good deals."

Here are some things to consider:

- Do you want to learn about REI or just be a passenger on someone else's plane? If you want to learn about REI, you aren't going to learn anything by investing in a first deal out-of-state. You could make money, but you will have no more knowledge of what it actually takes to be a better investor since you haven't seen any deals in person. And your entire investment will be managed and reviewed and maintained by someone you probably don't know very well.

- Why do you think there are no deals around your area? There are, you just don't know how to find them. If your 10-mile radius is overpriced, go up to 30 miles. You can't tell that within 30 miles of anywhere there isn't an up-and-coming area that has yet to hit its peak with deals available. Learn how to find local deals instead of hopping on the train of everyone who wants to sell you swampland in the Everglades for a great price.

- If this is going to be the single biggest investment in your life to-date, which most likely it is since you are new, why do you want to do this out-of-state and out-of-mind? What other investments are like this?

- Ask yourself how many properties you have seen in real life? How many times have you figured out what good electrical looks like and what bad electrical looks like? What about foundation issues? Do you know what markets have a saturation of abandoned oil tanks as possibilities? Even if you plan on investing out-of-area in the future, you should still be seeing 25-50 properties in person before you buy anything anywhere. Why would you take all this money and invest in something you haven't even put the time in to understand in real life.

- Analyzing deals on the computer or in a calculator, with no actual RE experience, is playing video games. You can calculate what a deal in Cleveland looks like based on Internet metrics, but which town is set to explode next? Who is telling you what is B- versus D in an area? Who can you trust there that DOES NOT have an interest in the sale?

Those of us who have been investing for 30 years don't talk about BRRR and we don't use acronyms for everything. I get why they are exciting concepts, but you can't talk investing well online and then expect to walk into an area and have old-school investors and sellers have any idea what you are talking about. The only way to get good as a real estate investor is to do the work in the field.

You have to know what a dump of a house looks like, feels like and smells like so when you look at photos of a crapshow in some random town that is a "steal" you know that it needs more than lipstick to go back on the market. REI, just like the Internet and Instagram, seems easy and looks cool online when you see everyone and their cousin flipping, but most people lose money in real estate. They just aren't here to say how bad they are doing because they hate real estate so much, got bad advice, and were scammed.

Stop looking at every market that is hot because if someone tells you it's hot now, you are one year too late. Find the area within 30 miles of you that is next to the last area where home prices have just gone up. Focus there. Get off the computer and calculator and go see properties, as many as your agent friend will take you to see.

I don't understand the mentorship. Where do you live? How many properties do you have where you live? What's the point of cyber-evaluating markets from a computer? You won't learn about those markets and how to get the best deals in out-of-state markets until you visit them and get the block flow and which is the next "it" area. Until you've mastered your local area and the up-and-coming spots around it, what kind of mentorship sends you to sit at your computer and scroll through lists online of what's good. Hint: if something is listed online as the best place to invest, it was good to invest a year ago.

Asking for out-of-state referrals and options is only going to get you a lot of links and experts in the area, some actually very good, but do you really want to invest out of state for your first investment, coupled with the fact that you will be doing it with friends. Who is in charge? Who is going to preview all the areas? Who is responsible for property management? Why can't you work harder to find something closer to you that you can see? What can you learn from long-distance investment for your first investment?

If you want to learn how to do better in the future with REI, you have to go see properties and understand what has to be done to renovated, what turnkey looks like, what all the costs are, and none of this can be done by searching neighborhood websites and using BP calculators. Those options are better for seasoned investors who can be loose with the numbers.

In any other context besides real estate, why would someone buy something sight unseen, never having visited the area, with no known contact for oversight of the investment, and expect it to do well? If you are your friends are going in together with 90k, make sure you can learn first-hand from doing it instead of trusting some people you don't know, out of state, that it will all work out.

Those numbers are about 3x too low for any areas that will appreciate in Florida for what you are planning to do. Also, Florida is the toughest state on unlicensed contracting in the country because of what happened after Hurricane Andrew. If you aren't licensed in FL as a contractor I wouldn't count on swinging in and doing the work yourself being as easy as it seems. There are places in Florida where you can get closer to your numbers, but it is slow there and deals may be out there, but appreciation is low. You could look at an area like Deland which is more rural, but rents are ok.

A lot of the terms you are using are BP-friendly, but won't get you far investing in out-of-state markets. The BRRR method and house hacking and neighborhood grading systems are not always applicable or understandable across the board for who you will work with in each market. And if you don't have a marketing strategy, counting on owner-financed is not wise. That takes specific marketing and targeting, as will all areas where you will need to send a lot out to get very few leads and then they will want to know you are local and available.

Do nothing until a contract of some kind is signed. It doesn't have to be perfect. The closing date could be far off, but don't fix things without a contract. But unless you are a licensed plumber I would not fix anything in her house that has to do with plumbing. What happens when you leave and then it bursts?

I always do LLCs, they provide the most protection for what you are doing. If you want to get regular loans as the LLC though you will need 2 years of tax returns. You don't need PM software any time soon unless you have the capital to buy a lot right away, which it did not sound like it. Quickbooks or Freshbooks is fine in the beginning as long as you keep track of everything.

Do either of you have a background in flipping and prospecting for off-market deals?

You have to take a step back before you make another mistake. Your first deal was an absolute disaster and only by luck might you escape with a break even. And that was local. Now you want to go into a foreign market with no help and do it again? First, you have to pinpoint all of the areas you made mistakes on your first deal and think if you can solve them by going out of state. You also said you have looked at a lot of deals, but looking online isn't evaluating deals unless you are an experienced out-of-state investor. If you have seen no properties out-of-state in person and don't know the neighborhood, the block dynamics, the city growth from those inside the city, you haven't see any properties. Don't be so eager to invest that you make another bad play. From what you said above, there were more issues with the first deal and I'm worried about what that renovation looked like.

Besides the dogs, it's the best-case scenario you could ever ask for. One person is the best, I don't care how many bedrooms there are as long as they are vetted and can pay. Less people equals less wear and tear.

It's the same problem anywhere that forums are fully public-facing and especially prevalent in real estate where everyone is trying to sell you something or get something for nothing. I find the self-promotion just as bad as the low bar set for what is acceptable to post. Just as bad as someone creating posts about himself and how he is being sued and how this and that is the posts that just say Need Advice - what should I do as a new investor? That's it.

It's not BP's fault, there is just way too much coming in for the moderators to work with. And it's not BP's job to weed out stupid posts, but the self-serving ones should be flagged. I flag all the time, but never get an update if it went off the site or not.

Real estate is a business built on training people how to self-flagellate all day long. It doesn't work. I don't know why the self-promoters don't get that. Just add some value and wait for it to come back to you.