All Forum Posts by: Spencer Hilligoss

Welcome @Julian Wilkey!

Congrats on the early successes, @Matt Koester. A smart former mentor of mine had a great way of adding “new” steps into an established business (or system): only add one key elements of new-ness in at one time into the system.

In this case: if it's your first time BRRRR-ing and you're still in the middle of it. Maybe wait until you wrap it up and learn from it to apply those learnings in a new market.

That said, if you’re feeling confident in your systems and processes. Go for it!

Disclaimer: i'm not a BRRRR guy. work on commercial value-add deals, but know a handful of BRRRR-ers personally who manage their entire processes across the country. They're hardcore system thinkers and it helps them manage business from afar.

@Tadan Cox the fact that it's on your radar that early is a great start. Personally, I think new RE investors are best positioned to joining an established company in the RE industry. It comes with a built in network of professionals, steady income to cover the basic needs and a structured way to start learning 1 side of the business until you move on to another (e.g. lending, brokerage, etc). As some of the smart folks on here have also mentioned, you can endear yourself to a capable investor and work for them. That's a great strategy as well, but you're taking a big bet that you 'pick right' on the person you follow. You're putting all your professional development eggs into one basket. Better be a great basket.

Started at 30. Talk to investors every week who started at a broad range of ages. It runs the gamut. It was incredible hearing the story of a lifelong GC who decided to start investing after working on other peoples houses for 40 years. It’s never too late.

@Jay P. Hi Jay - i’m a Californian syndication investor. Have invested as both LP and GP on multiple TX deals, across multiple sponsors.

Plenty of passive investors don't use an LLC for investing as a limited partner. If you are investing with a partner, that's one of the only valid reasons that i've seen my fellow Californians setup an LLC for investing as LPs in syndications.

In regards to the $800 fee: if you live and invest from California, and you create an LLC… you are not going to get around the fee. California goes out of its way to ensure you pay that fee.

I don’t think there’s a valid need to create a business bank account in WY, personally.

Reminder: sometimes syndication investors make the mistake of thinking that they can combine assets or income under an LLC to qualify for Accreditation status, but that's not how it works. Each of you will individually have to qualify as accredited if you plan to invest in Accreditation required deals (like a 506c).

Disclaimer: don’t take this as tax or legal advice. Make sure to talk to your CPA about implications on taxes.

@Robert Tinker we recently closed on a combo self storage and RV/Boat facility in Texas with our partners. I think it’s a killer niche as long as you vet the supply/demand and competition in the area.

@Derius Evans 

Hi Derius - we’re neighbors! I live in Alameda. Congrats on making the move to CA. Sorry you got here right when the smoke cloud from fire season settled on us!

Investing out of state was a big leap for us when we first bought rentals and eventually started investing in syndications.

I’d recommend researching and setting on your goals first, before you try to decide on markets. Are you looking for cash flow to supplement your other income? Do you want to be involved in the project or be hands off due to lack of time? BP.com actually has some killer resources that cover the various “Strategies and Niches” - i’d recommend landing on those first, then focusing on markets.

@Sean Dezoysa 

Incorrect strategy choice is the absolute, #1 most common failure for new RE investors.

Example 1: there are hundreds of new investors out there who are in coaching programs to become deal sponsors (aka - GPs or General Parkers) for apartment buildings right now. They are doing this because they see it as a way to ‘escape the rat race.’ The vast majority won’t make the jump. Some will even realize they don’t enjoy it, by the time they’ve dropped thousands of dollars and hours into it.

Example 2: Flippers and BRRRR-ers who don't like managing projects and thought it would be easy. They got into it because they want a ‘new way to make money and get financial freedom' - but they picked some of the most ACTIVE forms of investing as a strategy, and now they're in the hurt locker.

Example 3: overzealous self-managers of rentals who aren’t willing to “waste money on the property manager.” Of course, there are scenarios where someone can/should self-manage… but that’s typically when the person knows what they’re getting into. The majority of new rental owners out there who say they want to ‘self manage’ their rental because they want to get the most ‘passive income’... are signing up for a semi-passive (borderline active strategy).

New investors would do well to slow down. Way down. And dial in your goals first, so you can select the right strategy to save yourself years of frustration and thousands of dollars in capital.

@Dane Moore decide how you want to manage it. Don’t write off using a property manager just because you pay them to do the work.

Also, now is a great time to shop for a real estate savvy CPA if you don’t already work with one.

@Jon K.'s comments are on point. Can’t really go wrong with those Brandon Turner books, if you’re starting in rentals.

Don’t worry, the pain is coming. My guess would be Q3 2021. Of course, I could be way off and own zero crystal balls.