All Forum Posts by: Lori Greene

Great question. For a lot of people including myself it was “Ego” and desperation. Ego because you’re not willing to do things that are “below you”. The truth is nothing is below you, not even working at McDonalds. Becoming wealthy is usually a boring process.

And desperation because it’s hard for people to focus on the secret to success in business which is genuinely trying help people which is hard to do if you are broke and desperate, over worked and underpaid.

Luckily I learned these lessons young.

Good luck!

Jason, it sounds like you overcame these issues. Please share with us how you overcame the ego and desperation you mentioned.

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Originally posted by @Lenny Almanzar:

Originally posted by @Lori Greene:

Originally posted by @Lenny Almanzar:

I'm on the market to buy a duplex as an investment. My concern is not having any reserve for future repairs if needed. The duplex itself has a new heater and is well taken care. I'll be covering DP and closing cost. Which will then leave me without the reserve I'd like to have. I'll be house hacking in one unit for about a year or so. After all said and done I will be cash flowing right away as there is a tent with a 1 year lease well into 2020. After calculating vacancy and repair/capital savings, it will be a 10% cash on cash return. Not a bad investment by any means.

My hold up is deciding wether it is smart of me to purchase not having the cash reserve for future potential repairs.

Lenny, it would certainly be better to have money for repairs. If the property cash flows, then put that money aside every month to build your reserve. The main point of buy/hold/rent isn't as much about cash flow as it is about building wealth while the appreciation and equity grows as the principal is paid down. And let's not forget the value of the monthly rent you don't have to pay while house hacking. Rent saved should be seen as income that can also go towards building your reserve.

There's a great article on BP about why it is so important to put money towards CapEx which is short for Capital Expenditures meaning repairs on appliances and wear and tear of the property: https://www.biggerpockets.com/...

The article shows you how to figure how much you will need to set aside each month.

Building a reserve by setting aside monthly CapEx is important enough that it's a part of most cash flow formulas including the BiggerPockets calculator and the formula I posted in my reply above to Amelia.

Is there any reason you can't put some of your cash flow and money saved on rent towards a monthly reserve?

Thank you Lori,

Putting money aside for reserves such as vacancy/cap ex should not be an issue considering I'd also be saving in what I would be paying rent in my apt. I also plan on paying myself for property management each month to save for reserves as well.

That's great to hear Lenny.

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Originally posted by @Ashley Clements:

@Lori Greene I do find and analyzed deals but I could probably stand to do it more often. I have also referred a few out without expectation of a fee. From my understanding because I have a real estate license any fees/commissions paid to me have to go through my brokerage. That isn't an issue but at the moment it has always seemed more important to sync people up with others that can help them with their situation.

The idea of saving up referral fees and moving up to wholesaling sounds like a solid idea. However, I don't really have much interest in wholesaling and I think it gets a little complicated with the real estate license. So I may not take that direct route but I am going to start being more active on BP, analyzing more deals, talking with people about it more and sending out more referrals.

Thank you for taking the time to reply to my post. Your response was very thoughtful and inspiring.

I didn't realize you were an agent Ashley. That does make things a little different for you. That's why when investors ask us if they should become agents, we tell them that it could limit them a little as far as regulations are concerned. But, one way around that is to partner with someone who isn't an agent and put their name on things like a spouse, family or friend. You find and analyze deals and they sign paperwork.

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Originally posted by @Jackie Comitino:

@Lori Greene @Jan Kerr

Thank you so much for sharing! Your stories are truly inspirational

Thanks Jackie. That's nice to hear. Do you have any investing questions? How can we help you?

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Originally posted by @Erik B.:

Originally posted by @Lori Greene:

Originally posted by @Erik B.:

For me it's been finding deals that numbers make sense.

I have funding

I have time

I have some experience

I have flipped 3 and held 1 in the last 2 years. We are constantly searching, like everyday. I have goals and am ready to pull the trigger on multiple properties but numbers are just too tight.

To overcome this we have been working on setting up a marketing system to hopefully bring in our own off market deals.

Erik, yes off market can be easier to get at a lower price because not as many people know about it and off market motivated sellers may be willing to sell FSBO or seller finance which also saves on costs. You also have to be very creative to run numbers in various ways to see what works out best. We are very good at this. Reply with the details of a property, including the situation of the seller, the loan (current or delinquent) and your numbers analysis. Maybe I can give a few pointers.

One recent example...

cape style house legal 2 family by CO. 2br 1 bath over 2 br 1 bath plus. Basement access.

House was offered to me as a wholesale for $350k

$50k rehab

ARV $455k

Taxes $13k

Rental income $4300+/-

My plan was to hold this as a rental but I will always flip if needed. I originally offered $300k was willing to go to $315k.

I would have used HML to fund this. 10% interest only, 2 points, lenders atty fee of $2500.

other closing costs about $15k

Would refi out 4.5% over 30 years. Keep 25% equity pull out remaining (if any) in cash.

I now know wholesaler got contract for $281k. They never assigned it, wound up flipping it themselves. Spent 35k in repairs (absolute bare mimimum) and sold for 455k.

Most of the deals I come across are very similar to this. The numbers are close to working but just not there. ESPECIALLY with HML costs. There is little meat on the bone even with any value add.

The flips I analyze are also very tight w numbers. Profit is generally $20-$30k on $450k ARV.

Lots to think about here Erik. The first thing that comes to mind is deeper research. Usually when a wholesaler is involved, they have the property under contract. Did you ask to see the contract? If you knew the wholesaler got it for $281k from the get go, you may have been able to negotiate them down quite bit from $350k to improve your numbers. A $70k wholesaling fee is unheard of in an assignment situation. I could maybe see that happening in a double close, where you don't get to see the contract. Did you research this property at the county to find the mortgage deed and any liens so you could estimate what was owed on it to determine how much bargaining room there is?

The point is that the asking price isn't necessarily how much you can get it for. Once you know the wholesalers profit margin or the motivated sellers pay-off, that's when you know how much bargaining room there is. Also think about it like this: Just the fact that this wholesaler got this property for $281k, means that it is possible in your market to find motivated sellers with equity. So keep that in mind and stop telling yourself the story that all deals are too tight. This one wasn't.

And have you thought about building a team of private money partners who you may be able to pay 5% interest to rather than 10% to hard money? I can teach you how. I've mentioned it a few times in this thread. It's easy. It's how we fund all of our deals.

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Originally posted by @Randi Shannon:

@Lori Greene he finally responded to me not wanting to do the deal with him which makes even less sense the the rest of the deal has. Why would he dip all this work for zero profit? That makes absolutely no sense to me:

Sorry I was slammed this weekend and didn't get to respond to your text. That's fine. I told you when we spoke before that there wasn't any hard feelings if you decided not to. I was just trying to make it a great deal for your first flip so you could learn the things you needed to and not get screwed over by anyone on the first deal. Based on what you told me, I know you were concerned that I was somehow trying to screw you over, and was listening to other peoples opinion. I didn't tell you everything I had planned because I wanted to see how committed you really were to getting started. I had planned on doing the full remodel on that property for $20k(the companies cost for doing the Reno with no profit) for our venture and then forfeiting all of my profits on the back end and allowing you to make 100% of the profits once the property sold. You never just hand someone an opportunity

though, you always structure it to see if they're willing to work for it or if they just want a guaranteed win handed to them. I'll make myself available to try and help you some as you go on this journey alone. Feel free to shoot me a text or email if you need anything and I'll do my best to try and point you in the right direction.

Hmmm. That's an interesting response from him. But it sounds like you have good instincts to stay away from him. Let me know if you have questions about any other opportunities or properties you're looking at. Happy to help.

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Originally posted by @John Hamilton:

@Eric Stugart

Check out my post two lines off from this comment. I was in your same spot!!

John, thanks for reaching out to Eric. I can see how much you two have in common.

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Originally posted by @Eric Stugart:

@Michael Ablan Hi Michael, I’m real ok y glad I saw your post. I too am a lone wolf and would rather do everything myself but everywhere I turn I read things that say to get a good team behind me. I am nervous about getting swindled or things going south with someone. Could you please tell me how you got out of your comfort zone and got a team together? What were the steps you took?

Eric, it's okay to start building your team at your own comfort level. You don't have to partner with anyone or give them any money. Just build relationships and talk to these people and learn from them and get referrals from them.

The more you engage with them the more you'll get to know some of them and eventually get a feel for who you can trust. Hopefully that will soften your fears.

And if there are people already in your life who you trust, maybe you can get a few of them excited about what you are doing even if just for moral support. Moral support and education is a great benefit of building relationships.

Read through this thread more. There are more posts about how investors built their teams. In fact, that has been the main theme of this thread so far.

Read John's post a couple of replies up. Just the act of starting and engaging may be enough to get you out of your comfort zone.

I know you said you are a lone wolf because you're afraid to team up. In what ways do you feel that not having a team has kept you from growing? And even though you are afraid, are you willing start building relationships to help you grow anyway?

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Originally posted by @Ashley Clements:

What has kept me from progress is not being able to save up enough money for my first deal. Also, my spouse does not believe REI is a good idea. So anytime finances become an issue he is quick to say I need to use my REI savings towards something else because it is not as much of a priority. Then I have to start all over again. Unfortunately, I have not overcome this yet.

Ashley, do you look for and analyze deals? If you do, you can already truthfully say you are a real estate investor because when you come across a good deal, you can refer it over to another investor for a bird-dog fee.

Do you think that if you were an experienced investor and someone dropped a great deal in your lap, you would be willing to pay them a small fee for it, maybe $100 to $500 if you ended up buying it? Of course you would.

So don't get lost in the fact that you have to have funding to start investing. Just devote yourself to finding great deals and building a network of other investors to pass them over to for a fee. Then work your way up to a wholesale deal where you get it under contract first so you can get a bigger fee, like maybe $3000.

Save up your fees for a down payment.

And all the while, start building a team of bird-dogs to help you find properties and a team of private money partners who will partner with you by funding the deal while you do the work.

Do this by getting into the habit of starting conversations with everyone you know and meet. Ask them about what they do for a living or how their job is going. Then tell them what you do, you are a real estate investor always looking to partner up and share the wealth.

Say, "If you know anyone who wants to make a good return on their money with a short-term note backed by real estate, let me know." And tell them if they spot a vacant or distressed property or know of a motivated seller, to let you know and you'll give them $100 if you buy it.

You don't need a bunch of money to find properties for other investors. And once you have private money partners, you won't need much money anyway. Don't let the perception of lack of money stop you from achieving your dreams.

Maybe your fiancé won't argue with this approach if you are not using your money or borrowing any money.

Read through this thread for tips on how to find and analyze properties. Ask questions.

Do you know how to find and analyze properties?

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Originally posted by @John Hamilton:

@Lori Greene

I think everyone is scared at first. If you aren't, then please share some of that courage with me. HA I started my journey with a SFH that I lived in, bought a second house, moved and rented out my original house. Thanks to biggerpockets.com, I was able to be a landlord and rent the place myself the first time doing it. After that, my interest grew stronger. I wanted to grow and see my money grow, but I didn't know how. I shared the same struggles that everyone on here shared. I needed funding, deals and a general understanding of what I was doing. I educated myself and got stuck in the analysis paralysis state and didn't move forward after educating myself. Now I needed deals and money. The next step to success was finding like minded people and going to meetups to network and hear their stories. I got to the point where I could recognize a deal and now I needed money. I educated myself on hard money loans, HELOCs, lines of credit and personal loans. Then, I found what fit best for me. At one point, I remember being so frustrated that I sat down and wrote in a note book, "What do I need to be successful, RIGHT NOW!" All excuses aside, WHAT IS IT? I outlined all the things I needed and crossed them out one-by-one. I called local lenders, contractors, attorneys, CPAs and established a team. I wrote emails telling people what I was doing and where I wanted to go. "I was looking to establish a reliable and credible team!", to make sure my deal would go through on my first shot. From there I HAD to jump right in..... I had all my friends interested and they wanting to do deals together. The money came to me...

My new journey will be apartment syndication... Is it scary? yes.. Do people doubt me? yes.. Do I sometimes ask myself, WTH am I doing? 100%. BUT, I know that if you truly want something and you invest yourself everyday to be 1% better, you will one day reach your goal. I also love to say that, "I want to bring everyone to the party" because as Warren Buffett says, "Its lonely at the top". Don't be alone. Network and bring everyone with you!!

Best of luck in everyone's real estate adventures!!

YES, YES, YES!!! I love this answer John. That is a great story and such a common theme in this thread from those who have overcome their fears and perceived obstacles. You should be a motivational speaker.

I say perceived obstacles because an obstacle only has power if you believe you can't get around it. There is always a solution. All it takes is persistence and creativity and most of al, friends! Once you have a great team and great relationships, you'll have all of the help, resources and confidence you need.

Please share with us how you built your team? Was it mostly here on BP? Did you go to local meet-ups and auctions and ask for referrals? And describe a few ways that your team helped you accomplish things you wouldn't have been able to do without them? Do you feel like your team helped to squash your fears?

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All Forum Posts by: Lori Greene

Lori Greene has started 61 posts and replied 431 times.

Post: What has kept you from progress? (And did you overcome it?)

Post: What has kept you from progress? (And did you overcome it?)

Post: What has kept you from progress? (And did you overcome it?)

Post: What has kept you from progress? (And did you overcome it?)

Post: What has kept you from progress? (And did you overcome it?)

Post: Need advice on a deal

Post: What has kept you from progress? (And did you overcome it?)

Post: What has kept you from progress? (And did you overcome it?)

Post: What has kept you from progress? (And did you overcome it?)

Post: What has kept you from progress? (And did you overcome it?)