New investor needing help on a marketing/acquisition strategy

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New investor needing help on a marketing/acquisition strategy

Patrick Martone
Engineer · Monmouth Beach, NJ · Member since 2016 · 132 posts · 25 votes

Hello Biggerpockets community,

I am a newbie investor looking to make my first purchase in the next 3 months. I will be taking out a Line Of Credit on our current home in addition to my own cash. I expect to have around 250k total.

I am partnering with my father and working full-time project managing the Rehab process.

These are my tentative goals for the next few years.

2017: Buy first SFH flip

2018: Flip fourth SFH, reach 300k in equity

2019: House-hack MHR, phase out of SFH flips

2020: Buy subsequent MFR, bid at auctions

2022: Buy Commercial Property, Participate in syndications

Right now I am looking at properties in NJ as it is easiest. I have I feeling I will end up in PA due to the regulation, taxing, and cost in NJ.

How should I proceed with my marketing campaign as I have not decided on a location. I move around NYC, PA, and NJ a lot so I have a basic knowledge of the surrounding areas. I don’t want to begin direct mail until I am certain of a location.

Would it make more sense to go with an agent?

Should I do a We buy houses post on Craigslist to test the waters?

I would like to go for REO properties ideally?

Any insight on how to proceed with marketing would be amazing! Thank you

-Pat

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Ray Lai
Investor / Vendor · San Diego, CA · Member since 2016 · 1k+ posts · 949 votes
9y

@Patrick Martone

Looking at your 2017/2018 goals, it looks like you're not going for a high deal-flow. MLS is hard to find a good deal these days but it can definitely still be done if you spend a lot of time searching. If you have the time, getting a real estate license would greatly help you with your plan but using a good INVESTOR-oriented realtor is a good way to get started. You could house-hack a quad if those are available in your area to get some good landlording experience and good cash flow rather than live in your SFH that I'm assuming you're living in since you're taking a LOC on it.

Craigslist has lower probability of success but if you have the time, it could yield deals. It's really about how to use your time effectively.

If you're looking for scalability for more deal-flow direct mail is a way to go.

If you're looking for creative marketing - since you're in high density / high competition area you could take place a legal sign in a high traffic'd area by working with a local business.

Before you do *any* marketing though, you want to make sure you know how to close a deal and how to talk a seller and have a contract ready. Marketing before doing that is not a good use of resources. If you use a real estate agent you're talking ~3% commission.

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  • Account Closed
    Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
    9y

    @Patrick Martone   I would not use the phrase "We Buy Houses" on craigslist unless you want a Trademark notice.  The people that own that trademark are fairly aggressive. 

    0Reply
  • Ray Lai
    Investor / Vendor · San Diego, CA · Member since 2016 · 1k+ posts · 949 votes
    9y

    @Patrick Martone

    Looking at your 2017/2018 goals, it looks like you're not going for a high deal-flow. MLS is hard to find a good deal these days but it can definitely still be done if you spend a lot of time searching. If you have the time, getting a real estate license would greatly help you with your plan but using a good INVESTOR-oriented realtor is a good way to get started. You could house-hack a quad if those are available in your area to get some good landlording experience and good cash flow rather than live in your SFH that I'm assuming you're living in since you're taking a LOC on it.

    Craigslist has lower probability of success but if you have the time, it could yield deals. It's really about how to use your time effectively.

    If you're looking for scalability for more deal-flow direct mail is a way to go.

    If you're looking for creative marketing - since you're in high density / high competition area you could take place a legal sign in a high traffic'd area by working with a local business.

    Before you do *any* marketing though, you want to make sure you know how to close a deal and how to talk a seller and have a contract ready. Marketing before doing that is not a good use of resources. If you use a real estate agent you're talking ~3% commission.

    1Reply
  • Patrick Martone
    OP
    Engineer · Monmouth Beach, NJ · Member since 2016 · 132 posts · 25 votes
    9y

    @Account Closed yeah 2017-2018 is where I want to flatten the learning curve and position myself to properly scale. 

    As I am unemployed I have all the time in the world.  My skillset is the rehab portion and I really do not want to touch the marketing, buying, and selling aspects. In the future I would consider a partner with equal equity to cover those tasks.

    What are the benefits of getting a license if I work for myself? I would be willing to endure the process to avoid losing commissions since time is on my side.

    1Reply
  • Ray Lai
    Investor / Vendor · San Diego, CA · Member since 2016 · 1k+ posts · 949 votes
    9y

    @Patrick Martone

    Tons of benefits to getting a real estate license, here a couple main ones:

    1) Save on commissions on both the buy and sell end if you're looking to use a realtor

    2) Legitimacy when you network

    3) MLS access for easy comps

    4) See a house with a sign? Can contact agent and get an electronic lock box code sent to your phone usually and walk right in rather than wait for someone

    5) If you ever want to put in lots of lowball offers, this is the only way. Most agents wouldn't want to waste time helping an investor do that since it's low probability.

    6) Hard to find a good investor-oriented agent. If they are, they might pick up the best deals for themselves and you get the leftovers

    7) My fav: Expanding your real estate toolkit - rather than just wholesale properties when someone answers your marketing, you can now service homeowners with quality homes. That means you'll offer multiple solutions to sellers rather than only being able to buy from distressed sellers. Being an agent means you can now earn a sweet commission from people who have the resources to fully renovate their house to sell for top dollar

    1Reply
  • Patrick Martone
    OP
    Engineer · Monmouth Beach, NJ · Member since 2016 · 132 posts · 25 votes
    9y
    Originally posted by @Ray Lai:

    @Patrick Martone

    Tons of benefits to getting a real estate license, here a couple main ones:

    1) Save on commissions on both the buy and sell end if you're looking to use a realtor

    2) Legitimacy when you network

    3) MLS access for easy comps

    4) See a house with a sign? Can contact agent and get an electronic lock box code sent to your phone usually and walk right in rather than wait for someone

    5) If you ever want to put in lots of lowball offers, this is the only way. Most agents wouldn't want to waste time helping an investor do that since it's low probability.

    6) Hard to find a good investor-oriented agent. If they are, they might pick up the best deals for themselves and you get the leftovers

    7) My fav: Expanding your real estate toolkit - rather than just wholesale properties when someone answers your marketing, you can now service homeowners with quality homes. That means you'll offer multiple solutions to sellers rather than only being able to buy from distressed sellers. Being an agent means you can now earn a sweet commission from people who have the resources to fully renovate their house to sell for top dollar

    0Reply
  • Patrick Martone
    OP
    Engineer · Monmouth Beach, NJ · Member since 2016 · 132 posts · 25 votes
    9y

    have you heard of regulations where an agent isn't allowed to sell their own property?

    1Reply
  • Ray Lai
    Investor / Vendor · San Diego, CA · Member since 2016 · 1k+ posts · 949 votes
    9y

    @Patrick Martone

    Negative, I'd be curious if anyone knew about that because I still see agents selling their own properties in San Diego and Indiana. 

    0Reply
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