What would you do?

Question

What would be the first thing you would do if you had about 40k cash to start investing?  I currently have about 20k in a business account and have a partner that wants to put in 20k.  My father owns a contracting business and knows all about fixing a home and building one from the ground up and wants to invest down here in South Florida...

I'm currently getting my real estate license, trying to get per-approval for a hard money loan and searching for deals and what makes sense.  Where do you guys seem to find the best deals?  Wholesale?   So where would you start?! Thanks! :)

Steve Vaughan · Answer

Sounds like you have laid some good groundwork.  Got some cash, a potential partner,  a fixing/contractor contact in your father.  Focus.  Don't need a license at this point,  but you do need a deal.  You seem to be a good fit for a fix and flip.  Great way to put some cash in your pocket if it works out.  Drive for dollars.  Listen to some podcasts.   Don't be in too much of a hurry.  The hard money if you need it will depend on the deal. I have never used it because of the strict deadlines and high cost.  Know your market and get good ARV comps and repair estimates for your deal.  Outline some longer-term goals. Be extra careful using partners and family!  Good luck and keep us posted!

Joshua Houchins · Answer

@Connor Williams I have found over the years realtors are a strange bread of individuals there are a lot of normal ones but the vast majority are strange characters.  But anyway I would keep calling all of them Some will  say no or they think they are to good for you. I have had that happen when I first started now those agents want my business and of course I do not respond or reply that I am currently working with someone else.  You have to be relentless print ever freaking realtors name and contact info off google in your area and call them. That what i did eventually you will find a good one and one who wants to work for you that is important .....not just slap a sign in the yard and put it in the mls and cross there fingers.

Reo property are usually all on the mls in my state anyway. Most brokerage firms will have a search engine of the mls on there sight and you can do specific search for them that way.

Also when you do find a few brokers to work with get them to set up searches that will email you all homes that fit your criteria as soon as they are active in the mls  ie "as is" "needs tlc " " reo" etc etc.

Also Reia are ok some are some aren't alot of them are people preying on newbies some are are really good.  My advice would be not to share with them what you shared in in this forum attend a few and just sit back and watch who the players are and move with easy until you know what the group is about.  "The first to speak is usually the first to lose". I think you got the right game plan to go crazy searching for deals and make sure your math is extra conservative and you will do well.

Joshua Houchins · Answer

@Connor Williams I think you are set up and have a good game plan.  Flip a house put some money back for your next flip also buy some rentals along the way with your profits. gREAT GAME PLAN!  Really the only way to go.   I would start by contacting a few brokers telling them you are a investor looking for deals that fit "x" criteria and you can close fast,  I would also get a list of every reo in your target market and start pumping out offers,  wholesalers maybe .....,just do your homework most wholesaler under eatimate repairs and over estimate arv.   Maybe start running cash for home ads or direct mail.

But finally someone new in here actually has the right game plan out of the gate! Flip take portion of return buy a rental repeat for 5-7 years successfully you will be sitting pretty my find good luck!

Elizabeth Colegrove · Answer

what are you goals? What are you looking to? With your background I would buy cheap fixer uppers that would make great rentals. Fix them up rent them out.

Connor Williams · Answer

Well I guess I better start gathering my list of brokers and get to calling!  Exactly, the first to speak, that's why it's always wise to be a great listener.... Listen first... Speak second!

Connor Williams · Answer

Thanks for the kind words, really appreciate it!  Where would I be able to get a list of all the REO properties in my area?  Banks?  Cash for home ad is a great idea, didn't put to much thought into that avenue yet.  I have tried to contact a lot of brokers/agents in the area and it seems as if nobody is motivated to contact me back, which is strange, but will keep on keeping on until I find the right one!

Its funny you say 5-7 years because that is what I had in mind for a long term goal. ;) I also have been looking all over to find different REI meetings and what not to network that way and meet with like-minded people, as you never know who you'll end up running into.

Jeff Schwarz · Answer

Hi Conner, sounds like you have a pretty good plan.  Now find a property and go for it, just be sure and do your due diligence first and don't leave anything out of the math.  As for getting pre-approval from a hard money lender, be careful. There are lots of good solid lenders but to my knowledge none of us give a letter of intent unless you have been with the same lender for a while an done a number of deals on time etc.  If anyone promises you an LOI or any kind of guarantee for a fee up front DO NOT DO IT.  There are a lot of scammers out there, good honest agents, brokers, consultants, etc. representing funders do not and cannot charge or accept up front fees.  It is illegal anyway.  Just my thoughts.

Bryan N. · Answer

@Connor Williams

An agent is worth their weight in gold.  I would recommend networking in your area and finding a good agent who understands investors.  When I'm ready to buy, I shoot mine an email and he sends me properties that fit my criteria within 24 hours.  He even checks them out personally before sending them to me and verifies they will meet flip or rental expectations all off the MLS and occasionally off market.

Robert Ehrlich · Answer

Conner I reside in South Florida as well and been looking around.  I think the best thing sense you have some money to invest is to drive your area and see if you can find distress properties.  Also, I have reviewing Hud.gov. Being you have a father who is a contractor you might be able to find something there with great potential.

Good Luck!!

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