All Forum Posts by: Marcus Auerbach

@Logan Williamson just use those keywords and look for podcasts, blogs and forum posts - they are abundant and you will come across the same message again and again. Just like @Linval T. suggests..

I know its very tempting to start on this end, because it seems like you are building up for the day when you actually have a deal and it is less scary than talking to sellers. But actually all you need is a blank contract (from a competent, local source) and you are good to go. Find a good deal, get it under contract and the post on BP, CL and your local REIA. If the deal is good it will sell fast. Remember: the most important thing for most investors is sifting through potential deals and finding the next good one they can pull the trigger on.

People always think that wholesaling is the best way to start. I think it's one of the hardest things to do because you have to be good at multiple things: marking, spotting a deal, negotiating with a distressed seller, understanding ARV and estimating rehab cost correctly. Its very hard to do all that correctly without previous experience. It can be done, many have done it before you, I just dont think it is necessarily the best or easiest way to get started. How about a house hack to start out with?

@Logan Williamson don't waste your time looking for buyers, that's the easy part - have you found any sellers yet? 

@Matt Morgan sure let me know if have something. contacts in my profile. good luck!

@Anthony Way welcome to BP and congratulations to your graduation! You will find a lot of real world advice here and you can find answers to almost any RE question you will ever have. Buy and hold is definitley the way to go for passive income, but be aware that whole selling is a tough job and not necessarily the easiest route to get there. To become a good wholesaler you have to be a great marketer, understand ARV's very well and be an expert in rehab cost. And it's a lot of work! Don't let me talk you out of it, I just want you to have realistic expectations. I would definitley recommend to pursue a regular job as well - having a W2 income makes everything so much easier - like actually having a marketing budget. I could certainly not do it without a job. A good place to start is a house hack with a duplex for yourself. That will get you some much needed experience and as a nice side benefit - eliminate your housing cost. Just look for "house hacking" here on BP. And of course Brandon's famous BRRRR strategty ;-)

Good luck!   

Maybe a bit too much? Finally sold in September for 387k. 

@Edgar Avila it sounds cheesy, but it's true: the money will find the deal. If you find a great deal and you post it on BP or CL or your local REIA website your phone will start ringing quickly.

For some time I used to call every wholesaler that I came across in my farme area and asked to be put on their buyers list. They ask me all sorts of questions about what kind of house I am looking for and I tell them a 3/2/2 or 4/2/2 ranch - but I also tell them call me with just any deal, land, office, condo, whatever. And you may have guessed it, from most of them I never hear again.

So don't waste your time about a buyers list, just focus on geting a deal under contract.

@Linda Weygant I could not agree more with the complexity and the education required. Anything you don't do all day every day you are just an amateur. I had two really bad CPA's before as well who did not understand RE at all. 

However it wasn't for a lack of appreciation of professional services, for me it was not even so much about saving money as it was about control and being on top of things. From my day job I am used to manageing businesses by looking at their numbers and that's maybe why I put such a focus on them. The numbers always tell the story. 

In hindight I am not sure how I ever came up with the idea that I had to do the books in order to stay on top of my business. 30 minutes studing the monthly summary and YTD vs FC is much more valuable than spending days sifting through receipts. Only good thing is it tought me some basic QB skills and I can better understand what my book keeper needs from me. 

A year after I wrote this post I got a PM from someone looking for some help with QuickBooks and I realized that I had chnaged my opinion about 180 degrees and should propably close the loop here. So, what happened in the last 12 months?

QB (or a similar software) is definitley the way to go, however I would not recommend today anyone to take the same approach I did and doing it by yourself. I have spent a lot of time, energy and money (online coaching on QB) to get everything set up. I got it to the point where I had all my properties set up and was able to properly record all income and expenses. However, there were still quite some wholes in books. For example I did not upload all my credit card statements and bank account statements to reconcile with my records and actual spendings. Most of materials are paid with credit cards and they need to be tied to receipts line by line and also when paid at the end of the month tied to the correct line in my bank accounts. 

So mid year I had a meeting with my CPA to determine what was still missing. To be perfectly honest I felt overwhelmed and started to realize that I would never get the books to where I wanted them to be while holding down a job that requires global travelling and running rehabs on the side. Quite frankly, even with out those things - I am just not a natural as an accountant. My CPA said he'd be able to get everything caught up at the end of the year, but I've been through this last year and that was very costly and time consuming (CPA hours are way more expensive than book keeping hours). So I was driving home feeling a little defeated..  

I started to realize that me doing the books was the equivalent of me doing a contractors job. And while I get some satisfaction out of laying tile, let me tell you there are a few things that I dread more than book keeping! So it became pretty obvious I needed a book keeper. Turned out I am not the only one comeing to that realization (most small business owners suck in accounting) and there are plenty of services offered. After a quick google search I interviewed a few in close proximity to my home and made an appointment with the first one that told me they did work for a few appartment building owners.

I did not realize at the time that this was my best Christmas present this year. It took a huge load of my shoulders and I could finally focus the few hours I have at night on what really matters (finding the next deal, managing my rehabs and a little bit of property management). While they charge me about $30 an hour for basic book keeping the person doing the work is probably four times faster as I was. They quickly closed the gaps in my book and got everything to match and reconclie with my accounts. The best thing is they are working with the same QB file that I have on my laptop, so I have the data on my machine any time I need it. 

Now I am able to create a complete and verified P&L (profit and loss) statement, a balance sheet and a cahs flow statement for any given period of time with a few clicks. This is a huge help for me to manage my business, makes taxes easy and is a huge benefit when working with lenders.

Bottom line: if I would do it all over again, I would hire a book keeper right when I bought my first rental property.

@Brandyn Dietman You only get good answers if you ask good questions and provide good information. The comunity can work only with what you provide and you should put some effort into laying out the issue if you expect people to take the time and share their expertise. Just don't disclose the complete address. PM does not really protect you, as most guys here are well connected also off line.  

Also, if you have a deal that looks really good you should get it under contract ("accepted offer") right away - good deals don't last very long. Your offer will have at least an inspection contingency for lets say ten days, so you have some time to get an inspector in, take pictures and ask all questions you like on BP. If you decide to not go forward on the deal your agent can serve notic ebased on the inspection contingency. Older buildings have so many things wrong that it always makes for a great excuse to pull the plug if you have to. (However, be careful, because you dont want to be known as someone who does not follow through on A/O).  

Luck favors the prepared! Congratulations Krista!