All Forum Posts by: Paul Hitchings

Step 1, Pay down all of your debt excluding any student loans and trim your monthly finances as much as possible. 

Step 2, Save up 10K. 

Step 3, Get pre-approved for a loan of $150K - $200K

Step 4, Buy a duplex with a FHA loan

Step 5, Rent the other unit

Step 6, Fix your unit

Step 7, Put other tenant in your unit (for higher rent)

Step 8, Fix the second unit and live there a year. 

Step 9, Refinance after 1-2 years

Step 10, Rinse and Repeat

Sounds like an amazing event! Wish I was still in the bay :/

Inspiring call to action via junk mail is an art. If you are only mailing out one card to each address, you might be wasting the postage. Consider 3x postcards to a 1/3 as many people, to increase your return and keep costs the same.

Also consider door-knocking a dozen homes every weekend. Yes gas is expensive, but aface sells  better than a card, every time.

If you like a challenge, target some FBSOs, maybe you could find ones on the market for longer than 90 days. Door knock and tell homeowner that if they continue to keep their home on the market and it doesn't sell, the stigma could ultimately cost them more than the real estate agent fee, so if they want to really sell the home, they might consider working with a professional. Show them what happens, on paper, when their home drops X% after being on the market 180+ days (with local comps to prove it) 

Consider positioning yourself as an expert by making one YouTube video a week about anything real estate related.  Have other professionals join you in the videos to talk about different issues, title, inspections, financing, etc. The more videos you do, the more you tell your friends, the more they talk about it, the more guests you have, the more followers you get, the more inbound traffic, and eventually, it will turn into deals. Not overnight, but over time.

More than anything get your face out there. Go to every real estate related meetup within 15 miles of your office/home. Start one if there isn't a good one (a great inbound marketing tip). Volunteer 2x a month, preferably at two different locations. Go to everything your friends invite you to, always. Spend 24 hours a day telling everyone in New York that you know real estate and you are making things happen. Tell them about the video you just did about how aerial drone footage is the new thing, or about how the X district in New York is seeing a X% year-over-year growth and could be the next hot market. Tell them about some interesting real estate issue one of your buddy agents is having. Your existence is now 100% real estate focused, nothing else matters!

Bonus tip - do regular annual stuff in your neighborhood. Host a Spring cleaning garage sale event. Try to organize a 4th of July party. Maybe start a community garden. Anything you can bring your neighbors together for, several times a year, is a great way to increase your sphere of influence and show the world that there are things more important than profit.

Source - 5 years as an assistant to highly successful Realtors

My advice is join a team of Realtors looking for a new team member, preferably at a large brokerage. You can hold their open homes, work on their transactions, learn from them, etc.  Many agents plan to do it solo and basically end up at the office (or home) alone 40 hours a week, which is so demoralizing they end up kind of floundering. By working with a team, you keep yourself active, motivated and engaged in your business.

More experienced Realtors get many of their deals from friends and friends of friends. So getting face time at networking events can help. When you tell everyone you meet about deals you are working on, it shows you are actively in the game and ready for more work. 

As far as online stuff, I recommend one YouTube video a week. There are endless subjects in real estate to talk about and since you're newer, you can focus on market trends and general info at first, as you continue to become wiser over time. Every agent has a website, color listing flyers, listing presentation and the usual stuff. Set yourself apart from the crowd. Tell clients you'll produce a video tour of their home and ask them if other Realtors they know have offered a video.  A former boss and I used this strategy on a million dollar home with great success, but we also made a video of the area. Is a $600 investment worth a $30K commission? 

Working with title companies is another great way to aggregate data for marketing campaigns. You could target people 90 days late on their mortgage, for example. I would avoid being a short-sale negotiator or loan modification helper, at least while you're getting started, however. There are many online sources, beyond title companies, for lists of certain classes of homeowners. Play around with it.

You could take it a step further and offer aerial footage, using drones, of properties. You don't have to own/operate the drone, you can pay someone to do that for you.  While a drone-shot video might not necessarily sell the house faster, the point is it makes a great conversation point that your friends will not only remember, but will think is cool enough to tell their friends. And who doesn't want drone footage of their home?

If you want to start working with investors, consider doing little videos of local homes in your area that might be good investments. Maybe a multi that hasn't sold in a while, maybe a home that doesn't qualify for conventional financing.  When investors google the home address, they find your video, and then think "Gee, this Realtor is talking about a home I think might be a good investment, they must be smart, maybe I can call them and get him/her to give me free info about the market", which is when you pick up the phone and say "Hi Mr. Investor, I'd love to work with you, let me buy you a coffee and you can tell me about your investment goals for 2017". 

Check out these apartments, if you want cash-flow. Given you have a chance to change the course of your finances, consider that a SFR is typically not a great investment, in and of itself.

$600K - 5/3 - 4265 J St,San Diego, CA 

$520K - 5/3 - 3753 Winona Ave,San Diego, CA 92105

The first property is near downtown and would rent for FMV all day.

The second property is near SDSU and would rent to college students or the local populace. 

I have no affiliation with either property. I did live in SD for 3 years. Both properties would be an good long term investment, though I am uncertain of their rehab potential.

 Hi Austin,

My comment about construction familiarity wasn't meant to dissuade you, I only wanted to bring up the point because rehab costs add up quickly. But you don't have to rehab the entire place at once.  One thing that might seem like a no-brainer is that you can't really rehab a unit when a tenant is living there. So that $3000 monthly cash flow is nice, but that is fully occupied. If you fix one unit, you lose rent from that unit. If you are fixing a unit and a tenant moves out, you lose two units rent.  So it is important to look at the mortgage payment and the rent payment in terms of multiple vacancies and holding costs.  If you have a great investment but only cash reserves for 3 months if you suddenly find yourself at 50% vacancy, you are setting yourself up for failure.  Without seeing the property I can certainly see potential in the deal, but with multiple units come multiple headaches, how this investment ultimately performs will likely be more a result of your ability to manage a large project than your ability to find a great deal.  But if you continue to educate yourself and surround yourself with like-minded individuals, you will find that no man is an island.

Beyond looking at the home, I would also consider slightly more macroeconomic issues. Is your area growing or shrinking? Are local home prices rising or falling? Are businesses moving to or from your town/city?  Finding a deal in a declining market isn't always prohibitive, but if you plan on holding for the long term, taking a step back from the property and analyzing the market for the long-run can be immensely valuable.

Using equity to invest in a multi-family is a good start to your plan. But what then? Do you just rehab and rent the place? Do you do a full BRRRR? Do you sell it or hold on to it? How are you financing future flips? Cash flow or more hard money lending?

Also, what do you know about construction? If you're a rookie to hammers and nails, flipping and rehabbing properties is not necessarily the best option, since you need to be a little familiar with the industry, imho, to make sure the contractors aren't blowing smoke up your chimney. Rehabbing things using a licensed contractor gets uber expensive real fast, so unless you're going to put most of the sweat equity in yourself, factor in contractor quotes into the deal.  

Also consider when/if you are ever going to pay back the 2nd equity line on your mom's home, as that interest cost does eat into your bottom line (along with all the other interest, PMI, payments you have going on).

 Hi Matt and thank you for a thoughtful response. I certainly don't think you are being snarky and I was being a bit of a devil's advocate in so far as asking, in a round about way "what could go wrong with too many investors involved?" , which is kind of a joke on a website frequented by mostly investors.  Yes, they can drive demand up and yes than can make the market to strange things, but I guess my main point was "don't worry about what individuals are doing, always look at the market", so I think we agree.

 Was looking at 5085 Radnor a couple of weeks ago listed at $1900. Wanted to make an offer on the spot. Sold recently for $3500. So you're right!

 If Detroit has natural market factors indicating long-term growth prospects, why would more investors make that risky all of a sudden? If you invest for the long-term , I think Detroit is a buy all day. If you are trying to make a quick and easy buck, investing might not be the right game.