How does my plan of action sound?

Question

I'm a brand new hopeful investor with no money of my own besides what I bring in with a 28k/year job.

My plan was to start marketing right away.  I'm going to put out signs, craigslist ads, and generally drive around trying to find possible investment opportunities.  If and when I get calls, I'll go check the place out despite not having any money to buy.  I want to get used to talking to sellers and get off the couch!

I'm not exactly sure how to go about calculating ARV.  But! I figure I can use free resources to get a rough idea of ARV.  I might call up a few realtors and appraisers and ask to pick their mind about how they appraise real estate.

After I've been through the paces a few times, I'm going to bumrush every real estate investor meeting and association within a 50 mile radius!  I'm going to talk to as many investors as I can, show them the houses I've scrounged up and ask for advice and $.  Hopefully I won't come off as a waste of time and I can find an experienced investor to show me the ropes and (MAYBE) even finance my first deal.

Does this seem like a realistic way to get my foot in the door?

Any advice you can give me about determining ARV?

Thanks!

Jacob Reel · Answer

Thanks for the advice Casey!

Do most realtors charge a fee for the MLS info?

Casey S. · Answer

First thing you need to do is contact a realtor and get them to set you up on an email update that sends you all the MLS listings in your area below X number of dollars as they come out or get updated. When you get these go to google earth and take a look at where they are in addition to the photos that are listed. If they look interesting go take a look at them yourself. File them into a folder and go back and check them in the weeks after to see which ones are under contract, still on the market, or been sold. This will give you a pretty good idea of your local market as well as whats going on in individual hoods. It wont give you exactly what they sold for but you will learn A LOT from it.

Jacob Reel · Answer

Ok, my slightly updated plan is going to focus on networking.

I'm still going to view some houses...but I'm going to make sure I emphasize the fact that I'm not making offers.  I'm just going to check these places out tell them the highest my "possible offer" might be....if I made an offer.

I'm definitely going to start finding some investors in my area I can actually talk to.  But I don't want to just show up without having taken any action.  That's just lame.

You guys have any recommendations about networking?  I'm pretty charismatic so I should be ok =)

Kyle Meyers · Answer

Anytime you are unsure of the legality of what you are doing, you should consult an attorney.

I do not see any reason you couldn't talk to a seller about what price they would sell for, but I do think you could run into trouble making offers if you aren't planning to buy.

Owner financing is like getting a mortgage from the owner. Instead of writing an offer to pay $50,000 for a property, you would write an offer to pay $1,000 per month for 50 months. It is a way to get financing outside the traditional route.

Jacob Reel · Answer

So you guys think I should talk to an attorney first?

I mean...I'm not planning on signing anything when I view these houses.  I was just going to see how far I could haggle their price down.  If I can get somebody down to a price that seems like a good deal, I'll add that property to a list of properties which I'll take with me to REI-organization meetings and other networking parties and try to see if somebody might be interested.

As far as owner financing goes:  It kinda sounds like I need to find somebody who's having a hard time selling their house.  Basically, I tell these people, "Hey, let me take the reigns and sell your house.. we'll split the profits!"

Is that close?

I'll make sure to check out the forums and learn some more about owner financing.

I haven't started marketing yet.  I don't want to..ya know...break any laws when I start out.

Nick L. · Answer

Hi Jacob - welcome! Check out the flip2freedom podcasts on iTunes. It will give you a lot of FREE info from an actual investor. I listen to it for new ideas and knowledge, and also as motivation on those days when I am not feeling great about my REI journey.  Just keep taking action and don't give up.

Christopher Keivit · Answer

Hi Jacob and welcome to this exciting world of investing!  I have to agree with Kyle that making offers without the intention of carrying them through could cause a lot of legal problems - not to mention the damage to your reputation!  I admire your attitude of jumping right in!  I wish I could do that!!!!  Just be very careful with the legal issues.

There is a ton of info on the BP forums about owner financing; maybe try a joint venture option too (although I am not real familiar with those).  Good luck and let's have fun!!!

Kyle Meyers · Answer

I agree with those who suggested owner financing, you would be able to make offers you actually intend to fulfill. Making offers which you don't plan to carry out could have legal consequences, though if you put in a financing contingency and actually look for financing, you shouldn't have much problem. Of course, check with an attorney. I am about to start a similar plan, searching for good investment properties and making many offers, I am going to use owner financing offers to try to get good, cash-flowing, properties with little or no money down.

Gilbert Ryan · Answer

you find a owner with substantial equity and looking to sell bad. You have many variations of the technique, but in a nutshell, the owner will give you the mortgage.

Darren McAfee · Answer

I think ANY plan is a good plan. Speeking conservatively, of course. Most people spend so much time planning every minute detail that they actually forget make offers. Your plan isn't perfect, but whos is nowadays. Do your research, let em hang and make some offers. It's great to hear that someone is actually "jumping in" instead of just looking. Good luck!