The Initial Overview Plan

[Bryan L.]

Hello all, 

This is my very first post on Bigger Pockets.  My intention with this post is to get pointers and feedback on my investment plan. I am a self employed small business owner.  I generally have free-time to arrange my schedule how ever I want Monday through Friday.  I also have a fluctuating amount of cash each year from business profits.  I have a 150k Heloc at 5.75 percent.  I have the ability to apply for the same level Line of credit on my business but am going to do that yet. 

Real Estate experience

I am by no means a realtor but I have been very involved in purchasing 3 personal properties and 1 beach property. On one of the properties I essentially did everything other than listing the property in MLS and the purchase agreement/title. Watching Real Estate has always been a hobby and I am very comfortable with estimating home values in my area.

3 of these houses I completely remodeled.  Most of the work was contracted out but I did a fair amount of renovating and a summer of construction my self when I was younger.

The Plan

My goal is to purchase 1-2 50-100k properties per year over the next 10 years and rent them out.  The end goal is to have a total cash flow of 150k/year in 10 years.  

Purchasing Properties

For the first few properties I am planning to wholesale or purchase foreclosures.  The main reason for this is that I am going to be using borrowed money from the Heloc and I want to make absolutely sure the rent will quickly pay down the Heloc.  To do this I need to get these properties at the lowest possible purchase price.  

Wholesaling

I am planning to do a direct mailer campaign and be very selective with the first few purchases.  I am in the process of looking for a good title company in the area.  In my area I have built an initial list of about 20k potential property owners (from an online list company) and will start off targeting a 1k list.  I am not sure if i will send multiple mailers to the first list or build a new one if I don't get enough response calls. I have a complete plan behind wholesaling which is too detailed to put in this post. 

Rehab

As I am looking for mainly distressed houses I plan to inexpensively rehab the properties.  I have contacts in my area for bathroom, kitchen and other remodeling at a good price point. 

Funding

I am going to start with 150k Heloc and shoot for 2 properties and rehab.  That is going to be a tall task in my location as it is very hard to find any single family homes under 100K.  I can use my personal funds for the rehab if need be.  I can usually allocate about 25k a year if needed. 

Property Management

I am planning to use a local property management company in the area.  I have talked to 3 different companies and it seems they are all running around 6-10 percent.   

Marketing

I am going to focus on direct mail but I will also create a small website about the company that will be linked to all mailers.  

The Company

I am going to create an LLC. I will be a 51% shareholder and my wife will 49%. To start with we will use this LLC for the first two properties. I may create another LLC to put the third house under.

This is all just an overview but I am hoping to just start a conversation and keep track of what I am doing if it can help other newbies like me. 

Thanks in advance for any feedback or criticism,