All Forum Posts by: Ritch Bonisa

I agree with you guys.  Indianapolis is a great market.  I live here and it's been good to me.  Congratulations on your investments and success!

@Ree Rolle You might look into getting your brokers license.  You would have so much more information available if you were licensed.

Maybe get to know a few property managers.  They tend to have a few resources, they normally know a fair number of people, and they do get to see a lot of different scenarios.   

Get on some wholesalers' mailing lists.  When you get an email with a property, place the property on a google map (include price, any known rents, #bed/bath).  This will help you build a picture of what is going on in your market and where things might be happening.  

The RE culture is like the wild west. A bunch of cowboys using different methods to collect as many cows as we can.  Everyone works for themselves, so they answer to no one. The ethics and social structure is very scattered and undisciplined.  It's normally those who are disciplined and methodical who have the most success.  Truly running it as a business is a big factor.  

Years ago, I thought investors were all smart and all had alot of cash.  I learned that I was very very wrong about that.  I ended up having success because I understood rehab costs.  I found out that many people involved in real estate aren't able to establish realistic costs very easily.  

Most definitely, don't worry or try too hard to "fit the mold" of investor.  Just be yourself.  You will find that half the people at "events" aren't telling the truth or portraying things in the most honest way. 

Learn what you can and identify a future team.  Access to information means everything.  Just make sure you have a go-to contact for each area you might need.  Keep a list.  If you have a question, you want to be able to shoot them a text, email or make a quick call.  As you move forward, this list grows and you zero in on the ones that you think will work best for you.  

I still have my list.  I don't have to reach out to them much anymore, but I still respect their opinions a lot!  A shout out to @Steve Lehman & @Andy Rumple.  

@Jason Martinez HUGE CONGRATULATIONS!  

Nice "base hit"!.  If you can get a "base hit" every time - then you'll be very successful with minimal risk.  Look up Pete Rose's all time stats.  He didn't hit many home runs. 

Best wishes!

@Ree Rolle Wow!  I totally understand, I'm an introvert as well.  In my experience -  if you stay too quiet others assume you are a pushover and will take advantage or maybe not consider you.  Also, in my experience, if you are a little more outspoken, honest, and direct -  sometimes this can push people away.  

Remember - there are advantages and disadvantages to being an introvert or an extrovert.  Many introverts are deeper thinkers, have a sense of loyalty, develop fewer relationships (but deeper relationships), and operate much better 1 on 1 vs. groups or crowds.  Identify your strengths and use them. 

I do not prefer small groups where I don't know the other people well.  I really enjoy a 1 on 1 where I get to know others and understand who they are and what their motivations are.  I definitely prefer 1 on 1 conversations.  I attend groups and events about once a month and sometimes I have to speak.  I actually don't mind that part - it can be fun. 

I like to focus on one person at a time.  If it doesn't click well, then just move on to another person.  This actually makes it like searching for and purchasing a property - if it's not a good fit, then just move on.  And, yes, you might go through 10 people before you find one that works (same with finding a property).  In life, and in investment - the situation needs to be right for YOU. If it's not, just move on.  

Whether you are an introvert or extrovert - be careful about who you believe and who's information you trust, especially if you seek a partnership.  I hate to say this, but there are many who work in this world of investment that aren't totally honest, and many who suffer from a total lack of ethics. There are many people out there who will figure out how to take advantage of you to enrich themselves.  

The people that have helped me the most and taught me a lot - just happened to be introverts (what I mean here is - they are not people who handle themselves in a way that says "HEY, LOOK AT ME AND HOW GREAT I AM."  My advice is to stay away from the "LOOK AT ME" people. 

As you are starting out - here are some things to consider:

Anything you hear or (learn) - verify it through another source.  Doing this will help reinforce what you learn and enable you to make better decisions in the future, and make those decisions quicker. 

Always ask yourself - What is the other person's motivation or agenda?  This will help protect you to some extent, and it will also allow you to understand the processes that others use.  Overall, it makes you stronger and smarter. 

If it doesn't benefit you - then, don't do it.  I don't mean be selfish.  I do mean look out for your interests first.  Once you get going and have some experience under your belt, then, you can help others by sharing your experience and knowledge.   

Learn enough to be confident, then take action.  We live in a "Look at me" world. Sometimes introverts are perceived as lacking confidence.  You and I know that's not always the case, sometimes far from it.  There is great wisdom in a person who is confident, but not braggadocious. 

Ask questions and commit to nothing. Ask and listen. Here's where understanding motivations of others really helps. This is where you learn and  test what you've learned about others, and about investing.  When the right opportunity presents itself - you will know. 

If you're attending an event and need to meet new people that might be able to help you in your investment career - start with one person in the room and ask 2 or 3 questions.  If it sparks an interesting conversation - then GREAT!.  If it doesn't, go find another person and repeat the process. Ask people questions like "why did you do that?" or "what was your goal?"  "What were the steps you used in that process?"  Probe for responses to the how and why questions.  Once, you think maybe you've learned something - then engage in conversations that will prove or refute what you think you have learned.  As you ask questions, you also want to make a judgement (mentally) on the response you are hearing. Are you like minded and in synch with this person's responses, or does your gut disagree?  While you do this, keep asking yourself,"Does this person seem ethical?" "Are they credible?"

Eventually, you will meet one or two people who will seem trustworthy and be willing to help you in a genuine way.  Main thing is to determine if this person is trying to help or if they are trying to sell you something. 

Becoming friends first.  Maybe just look at it as -  searching for someone with credibility. 

I hope I said something in there that is helpful to you as you move forward.  I have learned that investing is more about practicality, and less about optimistic hopefulness. It's about logic, not about uneducated gambling. Fact vs. fiction, understanding methodology and systematic approach.  Breaking it down into philosophy.  I still take out a sheet of paper and list the pros and cons, and consider the ideas on worst case scenarios. 

Congratulations!  You know Pete Rose only hit 160 home runs in his career. 1,314 RBI's, 4,256 base hits - of those 3,215 were singles.  He had a nice career. 

I think investing is about getting base hits, taking advantage of the occasional home run, and minimizing strike outs.

Keep the bat on the ball!  Sounds like you are off to a great start!

Some of the issues:

When purchasing it is quite common for the seller to do one of two things. They either lie about rehab costs and scope, or they don't understand construction costs and rehab.  Either way, once you make the purchase - you're stuck with it.  If something doesn't seem right - best thing to do is walk away. The reality here is there are few brokers/agents and fewer wholesalers who understand rehab, costs, and time lines. 

Another thing is contractor psychology.  There are many that will overlook things and/or low bid just to get the job.  The ploy of course, is to change order in the middle and add those additional necessary items.  Kills your return. 

As investors, we want to be excited about low rehab numbers.  Then, you get a contractor who is thorough and knows what he is doing.  He gives a higher number - because he's thorough.  His model may have a minimal number of change orders (up charges). As investors, sometimes we will beat this guy up on price.  So he lowers it, then later when he sees he won't make any money - things slow down or he walks, or maybe does shoddy work to squeeze some profit.  Other times, as investors we remove things from the estimate to make it "cheaper".  This can get us into a lot of trouble.  Example:  I saw one one time, where contractor had a new roof in the estimate.  Investor removed the roofing from the estimate.  Job was completed, a month later the roof leaked.  Investor got mad, asked the contractor to put on a new roof for free.  Investor's property manager blamed contractor too.  Everyone was mad at the contractor and wanted a free roof, or money back from the contractor.  Contractor was totally innocent.  Problem was caused by investor trying to MAKE the deal work, instead of following SOW.  Also, investor could have walked and never made the purchase.  Nevertheless, the investor caused their own problem. 

Kind of a sad situation, but it does effectively describe the reason some contractors think that we, as investors, are liars, cheaters, and thieves.  

Of course, there are also contractors out there who will price gouge and it's just ridiculous. AND this is why, as investors, we think contractors are liars, cheaters, and thieves. 

IMO success lies in understanding these things and working within them.  These bad things happen and many times they stem from purchase price, bad SOW, or trying to make something work, that won't work, and YES, sometimes bad contractors.  If you step back and look at it - it boils down to purchase price and knowing your costs before you buy.  

I saw something happen like this not long ago.  Just wanted to share it.  

@Suzanne Marta Your last post makes alot of sense.  I do still believe Indianapolis is a great market and there are properties that can work for you.

I buy quite a few properties.  Source them myself.  You are correct many times the numbers provided by sellers are way off.  Comp and values over-inflated, rehab numbers way low.  

I look at 15-20 (or more) to find one that works.  There is a hunting process and it does take effort and time.  In Indy many of the duplexes are in less than desirable areas.  

You're smart. You've done your homework.  You've laid out the real challenges.  Sounds like you've passed on quite a few deals.  I think that's the smartest thing we can do as investors.  The property makes the deal work, along with understanding costs. 

I'm still finding deals, so I know they are still out there.  It has been a little harder in the last 12 months to find good deals, but not terrible.   Good news is that IMO rentals are more plentiful in the Fall and Winter months (at least they have been for me).  

Best wishes!

@Pooja Sethi I know one. 

@Suzanne Marta It helps to have someone local who understands your goals, and will search for properties that match your needs. 

I'd take a look at the Midwest.