My Plan to Start Investing

[Michael Douglas Christensen]

Hi BiggerPockets!

I have been learning a lot for the past several months, have come up with a plan, and wanted to run it by all of you with much more experience than me to see if my plan seems reasonable.

This Tuesday I am meeting with a friend, who happens to be a general contractor, to discuss the start of a new real estate investing business. We are both very interested in partnering and beginning a BRRRR-based business approach.

I have been going to the local REIA, networking, and learning as much as I can, and he has a lot of experience fixing up properties with fire damage and other problems. In July we partnered in a completely different business that raised $100,000 from a private investor. With this background we feel confident we can raise private capital to finance our future deals.

I plan to begin an aggressive direct mail marketing campaign and do everything possible to find deals (still trying to learn as much about this as possible) and he will oversee the rehab. Once the rehab is done we’re planning on partnering with a property management company. We’re hoping to find private financing for around 7-8% and then refinancing as soon as possible with lower rates.

This is what our criteria looks like:

-3 bed 2 bath SFRs and small multifamily properties (2-4 units) in Orem, Provo, and Spanish Fork.

-Total acquisition and repair costs must be 70% of ARV.

-Unleveraged ROI of at least 10% after all expenses.

-Preferably acquired and fully rehabbed for under $90,000

-Preferably rents for 1.5% of cost to fully rehab ($1,350 for $90,000 property)

Does this plan / criteria seem reasonable? Any input from those living in Utah would be great. Also, any advice with marketing and finding deals would be much appreciated. Thanks in advance!

Michael