How to Start a RE Business and Look Like a Pro

Everyone has a different story and technique for starting their business.  I am going to discuss how my wife @Michelle Krupa, AKA Household Six, and I started our business. 

We had invested off and on for ten years in real estate but in the last month started investing in RE full time. During the previous ten years, we were long distance landlords, bought-rehabbed-rented-refinanced (BRRR), flipped, house hacked, and got burned by two PMs. We decided to leave our W2 jobs and start our own real estate investing business. We both got our real estate licenses in Missouri and decided to focus initially on flipping to generate capital. Here is our process:

1. First off we picked out two business names we really liked and ensured both domain names were available on GoDaddy.com.

2. We had our friends and family vote on the two business name options. Our favorite name won out. Clearly, our friends and family are smart and have great taste ;-)

3. We bought the domain name for our business.

4. We went to 99designs.com and had our logo created. That was a phenomenal experience and I highly recommend it. (see signature line) The cost was $300. We got a great product and the logo sent to you us in eps format (eps is used to place your logo on flyers, door hangers, signs, magnets, etc..), jpeg, tiff, etc...

5. We stood up our LLC through a lawyer who speaks at our local REIAs, deals exclusively with real estate, and came recommended. LLC creation rules vary by state, I recommend you pay the $500 and use a lawyer. Also, don't be confused. If you are flipping you will create an LLC then your CPA will file a letter with the IRS to make your LLC an S Corp but it will only be an S Corp in the eyes of the IRS. It is an LLC for all other intents and purposes.

*If you are simply buying real estate to hold it, don't form an LLC if you have under three properties. LLCs provide anonymity and asset protection. That being said, you should purchase a million dollar plus umbrella policy until you reach four properties and create your LLC.

**If you do create an LLC and purchase the properties in your name as buy and holds you can always transfer the properties to the LLC for asset protection but that could trigger the due on sale clause. I doubt that would happen at this time but it is a possibility. BP has a lot of info on "due on sale clause" if you want more info.

6. Set up a google phone number. This gives you a local number if your cell phone isn't local, the ability to screen calls and to have a voice message translated into an email and sent to you. Plus it's free. Thanks google! (I know Alphabet Corp is slowly taking over the world but I am slightly ok with it....I digress)

7. Create a facebook page. This is the minimum via social media I would do. Twitter, google+, etc...be creative. Get yourself out there. Be known!

8. Business cards were ordered. Use Moo.com or Vistaprint. They always have good deals going on. Make sure your logo and name are both in large print. Again, sell yourself.

9. Create your website. Do it yourself using square space or wix or pay someone to do it. Please don't use WordPress - you aren't hosting a blog. However, ensure your website can post blogs you write, photos and videos of future flips, testimonials, and a place where people who want to sell their house to you can live their information.(the marketing machine you create should be leading people to your website. It needs to shine. It should look new and professional but doesn't need to cost 5k)

10. Have your CPA file for your S Corp status if and only if you are flipping or actively working in real estate. We elected S-Corp because we both became agents and we are flipping.

11. Start hunting for deals. You can use a wholesaler, find an agent who works with investors or hunt for deals yourself. We are doing a combination of all three. To include direct mailing, a sign(not bandit signs), magnets on our vehicles, printing out a flyer to put on doors/in mailboxes, and driving for dollars. The driving for dollars list was cross-referenced by @John-Delfin Skovirawith our county tax assessor site and a mail merger was created. I went down to the local print shop and got a great rate on both printing and mailing cost.

*If you want to blanket a mail route you can go to usps.com and look at the Every Door Direct Mail or EDDM. Postage is between 15 and 17 cents when you use EDDM. That rate is fantastic but your marketing is not targeted if you use EDDM.

12. Build your team. Throughout this entire process, you should be meeting with people in your area who are involved in RE investing and you should be networking. Go out and meet: agents, GCs, other flippers, lenders, etc... Go to your local REIAs. Put yourself out there. Tell people what you do. Hustle. Most importantly - be collaborative! Personally, I think if you are doing this solely for the money and nothing else you are in the wrong business. Purpose is good for both business and the soul - never forget that.

Best of luck to you!

Tips:

1. Use a hand written font for your flyers and direct mail letters. @Brandon Turner did a fantastic blog on handwritten fonts. You can find it at https://www.biggerpockets.com/renewsblog/2016/02/1... or if you use google docs, under fonts and other options they have some hand written fonts.

2. If you plan on direct mailing check out: https://www.biggerpockets.com/renewsblog/2014/04/0...

3. Use Redfin to hunt for deals. Redfin has a broker in every state so redfin.com updates almost as fast as the MLS.

4. Get a local agent! Some local agent should know what your property criteria are and have an alert set up for it. Any new house that comes on the market that meets that criteria are automatically emailed to you. Example: a 3 bed/2 bath, 1100+ square foot home in the 55555 zip code under 140k. That meets your criteria and you are alerted immediately.

5. Don't panic. How do you eat an elephant? That's right, one bite at a time. Same with this.

6. Start getting to know all the homes for sale in your farm area. What features do they have, what are they selling for, how fast do they sell, etc... Tour as many as you can.

7. Don't ignore auction.com and court house auctions. There are still good deals out there if you know how to look and aren't afraid to go to an auction. (Some municipalities no longer do courthouse auctions, my county and the surrounding counties still do)

8. I recommend you don't use list source or any other list readily available to purchase if you are in an area with a lot of other rehabbers. Create your own unique direct mail list. Use driving for dollars or here I found a local company that will create a list based on credit scores and other criteria not available on listsource.com. Don't be afraid to experiment.

9. Be willing to make some embarrassing offers. If the seller doesn't want your offer they will throw it out but have the seller make the determination. Don't talk yourself out of a possible deal.

10. Stay focused! There are a lot of shiny objects in RE. Don't get distracted. If you want to flip, flip. If you want to buy and hold multis, do that. Figure out your niche and stick to it until you master it.

11. Have goals and review them daily. Nothing will push you like a goal and a self-imposed deadline.

12. Understand you are going to make mistakes and that is part of the process. Don't beat yourself up. Learn from it, don't repeat them, and get back out there.

13. Again, build a great team!