Advice? New to South Florida RE, Can't Flip w/o Financial Backing

[Gary Calver]

I'm trying to get started in real estate investing with this going for me/against me:

Have almost $5,000 available from college prepaid that I don't want to use on a degree (my interests don't require a degree)

Just recently unemployed/freelance writer living with parents (no housing expenses)

Plenty of time on my hands available to possibly use for RE

Massive South Florida RE market (I'm in Southern Broward)

Limited available credit and can't freely open and use credit cards as I please due to credit score and job situation

Would probably get rejected immediately for any mortgage whatsoever

But I have available one of the best official REIA-condoned paid mentoring/hard money supplying programs in the country (BREIA's) that I could choose to opt for. I've seen in my neighborhood a bandit sign where an investor is looking to take on an apprentice possibly for a joint venture for a cut (plan to give him a call and inquire/gather info). And also I've purchased Bill Vaughn's The Simple Man's Guide To Real Estate Investing and have his info, contracts, and free mentoring by email.

Suggestions? Advice?

I can only really get my foot in minus the joint venture if I do doubles and wholesales which would be rather rare to find and work out it seems looking so far. BREIA's program seems like the best guarantee but they raised their price for the optimal program to $28,000 which would cost me $31,000 over probably 24 months after financing (they seem to emphasize short sales and they have as part of it access to their buyer's list). Feasible, but I'd like to avoid if there's another way to get help with hard money.

[Mike Hill]

@Gary Calver When you say "Get into real estate investing" what do you mean specifically? I would start there... get a little more specific about your goal. I'm a wholesaler so I'm clearly biased... but because you have limited funding and experience, that might be a good start for you. The buy and hold method might be out of your budget right now and rehabbing holds more risk, particularly at this time. Conversely, wholesaling is something that has very little risk involved.  

Now realize that when I (or anyone) mentions wholesaling as a good strategy for beginners, I can almost guarantee that the next 20 comments are going to be some form of naysayer telling you how hard it is or why you can't do it. While I've enjoyed the educational value here on BP, you're going to find that about 7 of every 10 posts are telling you why you can't do something, or why a certain strategy is dead, complaining about fake gurus, telling you something is "just reality," blah, blah blah on and on... take it with a grain of salt.

I'm not saying you need to spend money. In fact I agree that you can learn without it. In fact, in your position ($5k), I would NOT spend the money on a program at this time (on a side note however, the same person who would advise not to spend money on your RE education would encourage you to spend $100k on a college degree). FYI, I've spent well over $100k on my Duke University education and $10k on Real Estate Mentoring - I'll let you guess which investment I think was better in terms of ROI... but that's my personal experience and we can table that discussion for another day....

Point is, you look like a young dude with few financial responsibilities at the moment. IF anything, now is THE best time to explore your passions.... not when you have a mortgage payment, wife, and three kids. If you want to invest in Real estate , by all means, go for it. If you want to be a freelance writer, don't let a stranger on the Internet (no hate, I know he meant well), but who doesn't even know what your writing looks like tell you it isn't a "real job" and to go pursue a W-2 job. If you're gonna do it, just commit all the way until you can monetize it (They told JK Rowling the same thing right?). It's not the business itself... it's what you put into it. I have friends who waitress for like $6 an hour and those who waitress 6 months out of the year and clear $250k annually. 

Everyone who's ever been super successful at anything (including movie stars, celebrities, etc) were told by WAYYYY more people how unrealistic their vision was... until they did it. (Ask me how I know that?)

Also, while there is value in the experience of others here... some are not adapting to the times. Sure, there isn't the same amount of short sales on the market as 10 years ago... does that mean "getting into flipping" is delusional?? That's like saying, there are less people on myspace... social media marketing is delusional....

Is inventory less... sure... is it dry... far from it. You have people that get divorced, die, lose jobs, move, evict tenants and become motivated by different factors every single day. In addition, there are hundreds of thousands of deals on the MLS.

Oh the MLS.... I'm just waiting for these responses... :)

ANYTIME I've posted about deals that are on the MLS I get a TON of hate... it's amusing.

Fact is, the MLS is a marketplace for real estate transactions. If you don't think there are deals there, that in my opinion is delusional. If you visit my YouTube channel, the latest video shows you a recent deal I pulled from the MLS. It's completely transparent. You'll see how I found the property, how I made a profit, how I was happy, how the agent who collected 100% of the commission was happy, how the seller was happy (because we closed in as is condition in about 3 weeks) and how my end buyer was super happy.

Could my buyers find these deals themselves... sure. But a lot of my buyers are too busy to keep eyes on the MLS all day, or to make the calls, or to make the offer, or to negotiate the transaction,etc. When you do find a deal and lock it in for them, they're more than happy to pay you for it. If they net $50k on a deal... do you really think they care about the source??

I remember one of the contributors here spit venomous hate on one of the properties I posted here on BP a little less than a year ago. It was straight off the MLS. I was asking 85k for it. People laughed at me, people cursed me out, people said it wasn't worth 50k, people asked me to remove them from my buyers list. The specific gentleman in question was quick to point out my trash, MLS deal and "inflated comps." Nobody bought... so I kept it and paid $81k for it. I rehabbed the deal for $40k. That property sold for $210k... look It up.. the address is 824 NW 4th Avenue in Boynton Beach. Shout out to my haters.... love you guys :)

Point being... when you see things on forums telling you "How to do things" definitely check them out. When you see things telling you to be "cautious," check them out too.

When you see things telling you about what's not possible and what's realistic (ugh, hate that word).... for the most part, ignore them. Don't worry about other people, opinions, or even competition... worry about being the best you. Remember the 80/20 rule. You just need to dedicate to being in the top 20% of whatever it is you choose to do, so you can reap 80% of the profits.

Also, on the topic of inventory, and people saying FL is dry. Guess what that means? It means it's "dry" because buyers are buying everything they can. See some investors (particularly here) will only stick within the boundaries of "70% times ARV" which is what they've been taught. Now I know you're supposed to make your money on the buy and not speculation... I'm not suggesting that. But... based on the market situation and current demand here in FL, I've easily (and regularly) sold deals at 80% of ARV (been told my price is wayyy to high by the haters) and then had my end buyer make a nice profit.

Remember,

1. Although we lump buyers into one category, buyers buy for different reasons and therefore have very different criteria. Some buyers just want to make 20k, some buyers won’t touch anything where they make less than 50k. Look at these other examples:

Buyer A - using his own cash, wants to make a quick flip

Buyer B - Using hard money. Paying origination fees, application fees, 4 points, and 14% on the loan - he clearly NEEDS a MUCH larger spread than Buyer A

Buyer C - Buying for long term passive rental income

Buyer D - Likes an area, willing to pay more

Buyer E - Buying based on speculation

Buyer F - International buyer that just wants to park his/her money in secure US/FL real estate

etc…. all these people will buy at different prices

So it's not on me to decide that I can only look at deals that are 70% of ARV. Sometimes I get deals at 50%, sometimes 85% - I'm not twisting anyone's arm.... I'm putting potential deals out there and letting the market tell me what sells.... not people on a forum. 

Heck, I won't pay more than $30 for a wallet.... but people pay $100,000 for a Louis Vuitton bag, lol.... explain that to me. 

So now that my rant is over, (appreciate you if you made it this far) I want to give you some actionable items:

1. Sign up for all the Wholesaler's blasts in your market. Eventually you can probably do some JV deals with these people by helping them to advertise, or worst case, you just monitor and start to get a feel for the hot areas, zip codes and price points in your market that are moving quickly.

2. BREIA is a good club. Check out some of the others... DREIA (Dade), BIF (Broward Investor Forum), Distressed Real Estate Institute, etc... there are a bunch on meetup.com. Visit them all, you'll meet great people and learn a lot. One will probably resonate with you more than others...  pick that as a home base, where you're a regular. And remember, always look to serve and be of value to the people there rather than being a taker or someone who just tries to shove their business card in everyone's hand... that's not cool.

3. Take massive action. Contrary to what people on here say, wholesaling isn't hard per se. It does require discipline and consistency though. It's like losing weight. Is eating right (or in a caloric deficit) and working out "hard" or "complicated"- I don't think so... but a third of our country is obese. Not because there's a trick to it...it's actually quite simple. But because people have difficulty with focus, action and consistency, it can present a challenge for those who aren't fully committed to the process (as opposed to the result). Wholesaling will either cost you time or money (I don't believe in a "One strategy fits all") With $5k, I'd hold back on the paid marketing for a bit... try and do some JV deals with other wholesalers or check the MLS. You'll need to check it constantly and make a lot of phone calls. These deals are typically smaller in profit but you can do a lot of them in a short amount of time. Then, when you have some $$ together, you can invest it into your paid marketing.

Hmu if you have questions. I'm not on BP much but you can email me. Also, check out my YouTube channel. I have a bunch of case studies and "how to" videos on there. I try and keep it transparent so you can replicate. 

But if you only take one thing from this, you're young and have few responsibilities. Only you can and should tell you what's possible, realistic, what a "real" job is, and what you can or can't do. Now is the best time to explore. Wish you the absolute best of luck, 

Mike