How do I get my company off the ground?

Question

I am new and really anxious to free myself from the rat race. I filed an LLC in Hawaii and after months of trying, I finally got a small credit line for my company. I got a measly 500 dollar credit card. It's nowhere near enough to start buying properties but at least my company has credit to its name now finally. I have no clue what I am doing and I am just learning as I go while also reading books and listening to podcasts constantly. Every time I read and listen I get fired up again, browse around the internet until I get stuck and tired again. Then I go and watch more videos lol. Can anyone lend any advice on how to get this ball rolling? I am lost in the sauce but not going to give up on it.

Edit: I should also mention I am flat broke and screwed up my own personal credit when I was younger. So I am slowly trying to fight this uphill battle of growing this company and also slowly rebuilding my personal credit.

Edit: I should also mention I am flat broke and screwed up my own personal credit when I was younger. So I am slowly trying to fight this uphill battle of growing this company and also slowly rebuilding my personal credit.

Ryan Chatman · Answer

@Daniel Greenwood first and foremost, congratulations on getting started. It's great that you were able to do research and get your LLC started and establish some credit in the business name. It's also great that you're moving forward with a plan to rebuild your personal credit. That's going to be key even in building up credit for purchases within your business name.

As Genny  mentioned I hope you've started putting together a plan for your real estate goals. That will be a huge part in directing your actions.

If you want to stay in and invest in Hawaii, I'd certainly do that. Don't be discouraged since you're "broke" right now. Maybe while you take the next year or two to rebuild your credit, you can find a local mentor that has experience with the goals you decide on. You could possibly intern for them or shadow them as much as possible. Learn the ropes and gain experience through others. This could lead to finding partners that would be willing to invest and help you launch your portfolio.

Good luck!

Joshua McMillion · Answer

@Daniel Greenwood

You never truly fail as long as you are moving forward. Failing forward, picking yourself up, and starting again from a forward-leaning position is how success is created. Keep pushing, have clear key performance parameters, and network with others. Like @Douglas Spence said, Traction is a great book to start learning to run a company. You are just in the beginning phases like many of us.

My biggest recommendation is to surround yourself with like-minded individuals that will help keep you accountable and develop a plan to work toward the designed life you want your business to grow into. Write down your goals, speak them each day, and take daily action steps to achieve them.

Michael Borger · Answer

@Daniel Greenwood Congrats on getting started, even if the vision is a bit murky. When I began, I had left my PhD program at UH Manoa and didn't have much in the way of spare cash. I doubled down on my REI education, started networking, and went 100% into wholesaling. After closing a few deals and demonstrating I have the fundamentals in place, a good friend decided to be a private lender. That led to flipping which I still do islandwide to this day, even though I haven't been back in 7 years. Additionally, I'm now in the Anchorage market and, with some partners, am marketing and closing deals nationwide for owner finance wraps and other creative finance deals.

It's great to have vision, but you also need to not look too far ahead. Focus on learning your fundamentals, try to bird dog or wholesale some deals for some quick cash to take the edge off, create and implement a marketing plan, and then the doors will gradually open up for you. It doesn't happen overnight but focus on making progress every day.

Rick Pozos · Answer

Hey @Daniel Greenwood, Make friends in your area. You have NO colleagues on your profile. Meet some people in your area. I bet there are plenty of people in Hawaii that would love to chat about what they are doing. Get out and meet some people.

The networking thing is probably your best bet to get things rolling. Having different views and seeing what others are doing can get you to the point where you will see that it is possible for you.

As far as the debt and bad credit, take it one day at a time. Having been in the military for 6 years, there should be some stability in your paycheck. Can you take those skills and make some extra money on the side?? Sorry, that should not be a question, DO IT. Make some extra cash. Pay down debt. Live leaner. Get a smaller apartment, sell stuff that you dont need.

It takes some drastic measures to leap forward. What have you done to be ready to leap forward?? Do what others are NOT doing so that you can get ahead. No one is going to help you more than YOU!!

Good luck

David Lewis · Answer

3 simple tips:

1. Investing in real estate while on active duty IS very compatible. The VA loan should be taken advantage of. I have used it twice in Anchorage to purchase a 4-plex and a single family home with no money down.

2. This is counter-intuitive, but take some time and STOP listening and reading all advice (especially on the forums). You have the knowledge, take 2 weeks, organize and execute.

3. Execute, execute, execute

Doug Spence · Answer

@Daniel Greenwood Have you gone to any local real estate meetups in Hawaii? Thats a great way to connect with fellow investors and learn from them! Based on your situation, you will probably need to partner up with someone that has the credit and the capital to get started buying real estate. Are you looking to purchase in Hawaii? Or will you focus on more affordable markets in the continental U.S.? Also, I HIGHLY recommend reading the book "Traction" if you want to learn more about how to run a business.

Nice work getting started! Most people never even make it that far. Best of luck and keep us updated on your progress.

Genny Li · Answer

You need 25 percent down minimum for your first investment property plus a $10k float for emergency expenses beyond your own emergency fund.

My first advice as a flat broke person with bad credit is to leave Hawaii for a job in the southeast and find a property to house-hack when you can afford to buy.

The fact that you spent the money on an LLC and got a credit card for it before you had a plan is baffling and concerning to me. You seem to be in love with the idea that you can make money rather than having any sort of actual real estate plan.

Dennis Rocha · Answer

Aloha Daniel,

Thank you for your service, congratulations with your LLC, a small amount of progress is still progress with education. You have your references to fall back on which is good, try to use networking as much as you can as well.

Let me add some advice for your financial state at this time and a company that can help you pay down your debts, keep them in check and help you with your credit.

101 Financial with Alan Akina, local boy from here in Hawaii. Good place to start to get a handle on your finances, fix your credit and help you to move on with your investing.

Find them on the internet, you'll have a coach to teach you, learn how to pay down your debts and get in the positive with what you have.

As for investing, you've started, there's been good advice here and probably the references you've read. Use 101 to help you get to where you want to go even faster with less stress.

Good Luck. We're happy 101 Students for life ourselves.

Genny Li · Answer

@Douglas Spence I stand corrected.  So what are your specific, actionable recommendations for a servicemember in Honolulu who has bad credit and no savings and wants to invest there?

I will take a crack at the same challenge:

I hadn't actually looked up Honolulu before because I have as much a plan of investing there as on the moon.  I did now, and it's not half as bad as I thought.  Apologies.  I thought Honolulu was as bad as San Francisco, but it's really not.  Not at all!  There are actually condos that should easily meet the 1% rule rented out entirely that aren't that far from the base and aren't in bad areas(!!!).  The big killer would be the HOA/condo board fees--you'd have to vet the condo board hard to make sure that not only the fees were reasonable but they don't have a delayed maintenance monster coming down the pike.  Like this guy looks like a steal until you realize what the fees are: https://www.zillow.com/homedet...

And that's without doing any digging at all!

You also need to see if it will be legal for you to rent out the unit. Condos usually have hard owner-occupied percentages they have to meet and you might not have that opportunity, unless the condo is specifically an investor complex.  I don't think you can buy into a non-warrantable condo (an investor complex) with a VA loan, but please, whoever is more knowledgeable than I am, correct me if I'm wrong.

So my own (semi-uneducated, with what I could find out in half an hour about the area) strategy would be to try to qualify for a loan for the best (numbers-wise) property that I could get with at least 2 bedrooms, with 2 bathroom preferred if I could get it, where I'd be able to rent out after I left. Then I'd take a roommate to cover a good part of the mortgage and be able to save about half my housing allowance right off the bat.  After I left, I'd let my roommate stay for the full market rent and let him take on a replacement roommate.  I don't like the idea of investing half an ocean away from me, so when prices got good, I'd eventually cash out and take the money somewhere else.  I know people do long distance STR, but A) I bet there are lots of restrictions against those in Hawaii condos, and B) long distance would not be my preferred way to start doing STR....not by a long shot.

If you can't qualify, find out why you can't qualify.  Then do the things you need to do to qualify.

I can think of plenty of stuff that someone with a bit of a nest egg who can qualify for a VA loan and has the downpayment and a decent credit score can do in the DC metroplex where I am, because I know a number of people who have done it, and I mentioned those above glancingly.  In more detail, this would be my advice, based on what friends have done:  Buy a house with a lot of bedrooms and bathrooms for its price with a walk-out basement; have other people (usually servicemembers) as roommates, renting by the room; house-hack the basement into another unit, and as long as you don't install a stove you stay legal where you aren't allowed to subdivide but you can still have a large toaster oven, a hot plate, and a full sized fridge; then you have two complete units (local-style) when you are deployed elsewhere that will result in a decent positive cashflow and, if you bought in the right place, probably appreciation; cash out whenever the market surges and invest in somewhere that cashflows better with all your profits.  I know people who've done something like that around here.  One guy did the first bit and then switched to flipping it.  There are outs at many different points in the process.

But in Fort Hood, for instance, my first choice would be an existing fourplex.  There aren't basements there, and if you permanently house-hacked a duplex in Killeen in place of a SFH, you would get into all kinds of trouble.

So, what would you recommend, Douglas or anyone else? That's my best crack, with the caveat that I haven't even ever BEEN to Hawaii, much less lived there, and local knowledge is usually king.

Daniel Greenwood · Answer

@Douglas Spence thanks for the positivity, I know it can be done one way or another! Also I was thinking of doing section 8 in Hawaii maybe but also wanna learn how to aquire out of state properties with my company here. I haven't gone to any meetings yet because things are still strict here in Hawaii with COVID going on.

How do I get my company off the ground?

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