All Forum Posts by: Stephen Barton

Welcome @Alejandro Ochoa to biggerpockets! You have come to the right place let me tell you. What other people here have mentioned is gold. You just need to network in your area. Or you need to decide what area you want to invest in. Then, you need to find/meet people from that area. Getting plugged in is the single most important thing we can do in this business. It is really a people business. Your success or failure depends on who you know- not necessarily what you know. However, you will learn a lot right here but the best learning takes place out in the trenches, doing deals, meeting people in meetups, having phone calls with people you admire in real estate, etc. Your journey is just about to begin! How exciting!

Sometimes we get hung up on should we, could we, or how do we get into real estate investing. For me, the best way was to simply just get started. I am by no means an expert but I have done a few deals now. I have seen the one character trait that separates the winners from those who never get started is- drive! Or maybe it is Passion. I feel that I have both. You need one of those to get you out of your head and into the game. You are going to make mistakes. You might lose some money but hopefully it pale's in comparison to what you are able to accomplish.

I have seen a few investors come my way who were really- I mean really smart people. They had all of the tools necessary to do deals but they just lacked that ability to say: "Hey, I don't know if this is going to work. But I have analyzed this deal 100 times and if it fails it will just be a learning lesson". They just could not pull the trigger. I admit it is not easy. Take your own hard-earned cash and pile it onto a home that you have absolutely no intention of ever living in. It can be scary. But, hopefully you have built a team around you who is guiding you throughout the process. By myself, I have done nothing. But because I have been blessed to be around so many amazing people -I have had some great successes in my career. Not because I am so amazing (yeah right!) but because I trusted in those who I looked up to and who I trusted for advice. 

You are never going to get anywhere unless you start somewhere. I had to start with $500 cash that my wife and I had saved up to get started. We would have never dreamed where this journey was going to take us, and where it is still taking us. But we love the journey. We found others that we now love who share that journey with us. Just the relationships that we have had makes it all worth it. We love the people we have worked with and consider some good friends. You are not going to achieve your dreams analyzing a deal to death. If it is a deal -then, it is a deal! Do it! If it doesn't work out. Then, try it again. Keep going until you get that first deal to go through. It is all worth it once you get past that initial shock of getting started. You too can do this! 

Very well articulated @Charlie MacPherson! You could not have said this any better. Totally agree. 

@Andy Rumple hey same here! Do what you do. I was speaking to others who actually have an opinion and can leave emotion out of it. I used to wholesale. So, I get it. Embrace it brother! It is who you are. No shame is being what you want. If that is what you want. I personally felt like a pawn broker of real estate. For someone new to real estate doing deals is pretty awesome. Making money is even cooler. But doing so at the expense of others? History will declare a victor. My guess, wholesalers will not make the cut. But I am just ranting. It doesn't mean I don't like you or the other wholesalers that I consider good friends. We just have a difference of opinion. I knew I would stir some emotion out of people. Not my intention at all. I just wanted to people to see just because it is "legal" does not mean it should be allowed. Again, history will show the winners and losers. I just choose to be neither or those. I just want to be me. Good luck!

@Josh Blakey it CAN be done. I can give you a few pointers if you would like? You may need to put in some sweat equity especially at this price point but it can be done. Stay inside the loop of Indy and there are deals out there.

@Chris Fernandez I totally get it. However, I have helped my clients achieve exactly what you are looking for. How? Because I have been a wholesaler for a few years and know most of the players in this area. You just have to dig. You have to be at the right place at the right time and the only way that can happen is by constantly looking. There are deals on the market showing on zillow, realtor, etc. I am trying to get one of my clients to make another offer on his second deal this week. He is also doing the BRRR strategy. It can be done!

Wholesaling definition according to the Oxford dictionary:

sell (goods) in large quantities at low prices to be retailed by others.

Back in 2014 when I started down the path of real estate investing I was taught one thing: buy a house at a low price, add my fee, and then sell that home to investors "off market". Doing this enables the investor who is the flipper or landlord to make the lion's share of the profits. After all, they are the ones that are forking over more time, money, and energy to see that deal to its fullest potential. A wholesaler is simply the deal finder and they should be compensated as such. Sometimes you do well on a deal and other times not so much. Again, we were always taught to leave room for the investor we are selling to. That way, they keep coming back for more. 

In Indiana, we are now officially (for the last two years now) in a seller's market. There are more buyers than there is product to feed the appetites of investors and normal homeowners. Wholesalers have now realized that they can simply list their (what used to be off-market deals) deals on the MLS. Most wholesalers I know around town have almost all exclusively went out and gotten their real estate license just for the purposes of again- maximizing profit by listing their deals on the MLS.

Let's put ethics and morals to the side for a minute. Although I think something should be said for the sort of person who has a real estate license to engage in this behavior. They are running a business. I get it. They have to make money. But at what cost? I have several clients that are currently looking for flips, and rentals. I see the tax records and it just blows me away on how much some wholesalers are making on each deal. Whatever happened to wholesalers just adding on a fee of say 5k to 10k per house depending on the price point? 

I have to be totally transparent here. This is not going to be easy for me to admit but as an investor I have worked as hard as I could to maximize profit on any particular deal. Now, what I see happening here in Indiana just disturbs me. Perhaps, it is an ethical issue I have now that I work specifically as an agent and no longer wholesale houses. I have shut that business down and refuse to do anything but get the absolute best price possible for a buyer or seller I represent as an agent. Maybe I am the dying investor whose head is stuck in the clouds. 

If you are an agent and you are wholesaling is it morally ok to get a seller down so much that you are making most of the profit? I see on some wholesale deals that the wholesalers are making almost as much as the flippers! I was even guilty of this a couple of rare occasions. Which is why I shut that business down. I could not stomach the figures in the end. I just don't want to be remembered as that person. I would rather be poor than have a reputation of someone who cared more about a profit and loss statement. Where do we draw the line? Who will be bold enough to change? Will it only continue to get worse? Is this what investing is all about? Just haggle with someone who is maybe retiring and needs to sell a house or maybe someone who inherited a house to the point where they barely walkway with any money? Is that ok? 

Let me qualify myself by saying I worked more than 200 transactions in the last few years. Most of those were wholesale deals and some were me working as a real estate agent for other investors. I have owned a couple of rental properties that we recently sold to start flipping. I have flipped a total of 4 houses to date all of which have made a profit even with a shoestring budget. I am not the leading authority on investing and never pretend to be. I just have a few years of experience and this post is just for those wanting to get started.

If I was going to get started all over again I would do exactly what I did all over again. Here is what I would do:

• Start going to meetups/seminars anywhere I could meet other investors. This is especially important if you are investing in the same area that you live in.

• Save up about $500 or so and buy a list from somewhere like listsource and get some absentee owners that have some equity and who have owned their house for more than just a couple of years.

• Start writing letters by hand to those people on that list.

• Start talking to people, sellers, investors -anyone and everyone. It is not what you know but WHO you know!

• Partner up with another wholesaler in your area whom you look up to. Send them your potential deals and co-wholesale together. I did this and it worked so well that I was able to learn enough to do it on my own.

• Start doing enough deals that you can build up some cash and invest in yourself and your business. Get a real estate license if you want. This worked wonders for me but some people do not believe in having a license. Build a website to help you capture leads. In this day and age, you have to have some sort of online presence. Even if it is simple website- just have something. 

• Once you can start hiring some people to help you streamline your business then you can start looking at what steps you want to take next. For me, the obvious choice was to start flipping and working as an agent. I had a big conflict with wholesaling once I became an agent but there are tons of examples of people who wholesale and have a license.

• Now, that you have a business up and running you have to grow. The only way you can grow is by doing other investing. The sky is the limit here but you can move into buy and hold investing, flipping, notes, whatever because you have built a business that drives leads directly to your inbox. To me, it does not get much better. 

Granted I am not some investor sitting on a tropical beach writing this while I watch my bank accounts grow but I have had some success and considering that I am physically disabled I cannot work as everyone else can. After serving in the Army I ended up having major back issues. That has limited my ability to do what I want. But it certainly does not stop me from the current lifestyle I now enjoy. Biggerpockets has been such a huge part of that journey for me. I am so thankful for who I know now and not just what I have. For me, life is pretty good. I even get to help other investors around the country and sometimes around the world invest. It is my way of being able to give back. What a gift it is!

Investment Info:

Single-family residence fix & flip investment in Indianapolis.

Purchase price: $105,000
Cash invested: $20,000
Sale price: $164,900

Contributors:
Christy Barton

This by no means was a home run but was a live in flip. However, most of the work was done during the last month of living in this home. We completely renovated the kitchen, and master bath. We did some painting and flooring in the master bedroom. All of the mechanicals were updated throughout our time living in this home.

What made you interested in investing in this type of deal?

We bought this house well before we really knew much about real estate investing. All we knew in the very beginning was that we got a good deal on the purchase price.

How did you find this deal and how did you negotiate it?

We found this deal the day it went onto the market. In fact, it was before I even obtained my real estate license. We searched our local BLC website Matrix and found it. I will never forget the day we went to do our initial walk through how at least two other people drove by the house wanting to see it too. We were very quick to write our offer and luckily the stars aligned for us.

How did you finance this deal?

FHA mortgage

How did you add value to the deal?

We added value by updating the roof, furnace, water heater, Central Air, and then doing a decent sized renovation on the interior. We also did a fair amount of landscaping during our time living in the home.

What was the outcome?

We made a decent profit which we then rolled that money into a down payment on our next live in flip which is at a much higher price point. We sold the house in 3 days! I attribute this to being in a great market but also doing the right finishes and pricing the home at the right price.

Lessons learned? Challenges?

If we could do it all over again. I think we would try to do the reno in the beginning rather than waiting right before we decided to sell. That was tough for us. Having all of these nice finishes in a home we had lived in for a couple of years and then we had to sell it without ever really enjoying them.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I ended up getting into real estate investing and eventually got my real estate license. We saved on listing agent fees plus we knew exactly what we could sell the house for.

I agree with @Will Barnard. However, I will say that more and more people are now working from home and not going into an office. So, I have found in the Indianapolis market that office space is essential.