I am 20 yearsd old, i've done my first deal but how do I set the business up?

Question

Hi BP friends!

I have done my first deal. It was a multi family REO. We rehab it and have been coolecting rental income nw we are in the process of our exit strategy which is to sell the property.

However, my question to all is. How do i set the business up? what do i need to do first, create a business plan? set up an LLC? Set up my team? I'm looking for some advice from you guys so please feel free to reply.

James Vermillion · Answer

Geoffrey,

I would do a forum search on business plan and starting out.  There have been a lot of new investors come to BP (including myself just 2 years ago) that had a lot of the same questions and needed the same guidance as you.  
Having said that, if you do not already have a business plan, start now.  Take the time to really think about which direction you would like to go, where you want to be and how you plan on getting there.  The benefits of putting your plan on paper are great, and include:
1)  Organizing your thoughts and goals
2)  Finding loopholes or areas you missed in your initial planning
3)  Provides a historical record of your original plan
4)  Forces you to gather more information through research, market analysis, etc
You specifically asked about marketing, which should be a section in your business plan.  There are many different marketing strategies that can be successful depending on what you are trying to market, your real estate market and your ability to employ different strategies.  Find out what has been successful in your area and what has failed miserably.  Again, search the forums to find tons of great threads with information on how people have marketed their business when starting out.   Do not get too caught up  in marketing though, I have seen people focus on sending letters that they never closed a deal.
One of the main things you need to continue to do is educate yourself.  Find as many methods to do so as possible and start right away.  Read articles/blogs on BP, network with successful investors, attend REIA meetings and expand your knowledge.

Congratulations on your first deal, now turn that deal into a business!

Kevin M. · Answer

How did you start?

James Vermillion · Answer

Geoffrey Murphy, I am glad my post helped.  The best part is you have done the hard part, completed a deal.  Once you organize some thoughts and come up with a plan, you will be well on your way.

Geoffrey Murphy · Answer

James, your post really brought a lot of clarity to my eyes. I often find myself trying to figure out what to do next. I think a business plan will help tremendously.

I want my business to have a systems in place. Starting out is one of the most rocky roads but im willing to fight and wait for the results.

Any more suggestions as to what else i need to have and actually turn one deal into a business!

Geoffrey Murphy · Answer

I don't really want to put the thread in a different direction.

What would you guys do first or if you were in my situation? Business Plan? Market? ect...

How do I create a system for the business?

George Saad · Answer

Geoffrey,

Maybe you have misunderstood my point.
My question was about bank loans,i wanted to ask you if some 21 years old employee has the right to take loans from a bank to buy more than one real estate?

Regards.

Geoffrey Murphy · Answer

Raymond,

First and foremost, it's a pleasure to meet you! I actually have attended the Reia in CT many times! I know joanne, lou ect...

I actually allowed myself to be distracted from going because I just did not see how important it was until now!!

I will definitely be there for the next meeting, and I would love to finally meet you if you do not mind....

if there is anyway I could be of help to you, feel free to let me know! Is there anyway we could have a phone confrence or grab some coffee and talk? I think I have a lot of services that I could bring to the table

Raymond B. · Answer

Geoffrey Murphy,
The REI club in Ct., usually meets the 3rd Monday of the month, in Cromwell, Ct.
Attendance is usually 100+ people.

This is the site for the REI club: www.ctreia.com

Raymond

Geoffrey Murphy · Answer

George-

I do know 21 year olds that are making specific salary. However, the only thing is I do not think any of them are interested in the RE business! but i will look into for you!

Mike,

Thanks alot for the encouragement!!!! It is so much needed at times, trust me! This has a been a topic that has been on my mind for sucha period of time because now that the first one was done i was done, I thought it was time to make sure I had a few things in place, like my own LLC (which i currently have) my own accountant, my lawyer ect...

Pretty much in a nut shell I just wanted to kno was there certain things that I need to have in place before this business of mines picks up!!!!!

P.S. If there is anyway I could be of help to you or your business, feel free to let me know!

Michael Power · Answer

Geoffrey / Congratulations!  At 20, this is quite an accomplishment.  I am always awestruck at how some folks get it right at such a young age.  The world is your oyster.

If you plan on doing this again, (and I suspect you will), then put an LLC in place.  Join your local REI club, make contacts, and do this correctly.

If you plan to sell this house, then I suggest to do it from outside the LLC, (since that is where the house is now), for tax purposes.  Perhaps others can chime in on this item to set me straight.

You do need to talk to folks...accountant, lawyer, banker, etc...in that order.  Don't worry about a team or business plan right now.  Those will naturally come.

We're cheering for you!

Mike P.

I am 20 yearsd old, i've done my first deal but how do I set the business up?

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