Like other's have mentioned, I think you have to decide for yourself which path you want to take:
Single Family Wholesaling/Flipping or Multifamily Syndication.
Here's what I recommend for each path based on your $120k.
Wholesaling/Flipping:
1) Find a mentor (plenty to choose from in Houston)
2) Setup all your systems (cold call dialer, CRM, data mining, etc etc)
3) Learn all the zip codes. Houston MSA is massive. Yea, you're from Houston, but growing up there doesn't tell you the nuances of the whole MSA like school district, rent rates, where did it flood in Memorial Day Floods of 2016 and Harvey of 2017, etc.
4) Walk a bunch of properties and learn to know what to look for. Foundation problems are very common in Houston. Know the signs and costs. Pier and Beam foundations are cheaper to fix than concrete slab, etc. Learn your rehab prices.
5) Go to networking events and build up buyers list
NOTE: Getting your RE License is optional and I probably wouldn't recommend it because:
- You won't be buying any deals on MLS or helping your mentor buy any deals there so your point on saving on commission is moot. Everyone gets off market deals from their marketing, everything that hits the MLS in Houston is not a deal or is swooped in a day. All the big players that I know wholesaling/flipping in Houston (making 7 figures a year) all have massive marketing systems and don't buy a single property on market.
- Your mentor will already have MLS access and probably multiple acquaintances to have multiple sources of access to MLS. Just keeping it real.
- You can save 3% listing your flips, but there are also plenty of excellent flat fee listing services that charge $100-$300 to list it on the MLS so you really could save your time and money just using them and still pay the buyers realtor 3%.
6) Scale. Massively. All I see in Houston are either people that always want to do it and do 2-3 deals a year, and the people that treat it as a business and scale and do $500k-$1M a year in profit. Dump that $120k all in marketing and hiring a VA to cold call full time. You dont need it for your own flips, thats what private lenders are for.
7) Be Realistic. It's great to be motivated to take over Houston but there are plenty of big dogs that have been around for awhile. You won't be overthrowing them. But Houston is so big, there's room for everyone to eat. I know plenty of investors making $100k or more just doing this.
Multifamily:
1) Spend the $5-10k on a program. Jake & Gino or Joe Fairless or Michael Blank or Vinney Chopra's or Brad Sumroks Foundations. BP tells you not to pay gurus thousands, but that doesnt apply to multifamily. Multi-family is an unfair game, its all about connections and relationships. In every MSA, there's really only ~5 brokers that control 90% of the deal flow and unless you can associate your name with a big player, you aren't buying anything unless you overpay. Like if you don't know (as in have multiple face to face interactions and have strong multifamily experience) with Jim Hurd, Tom Wilkinson, Russel Jones, Jeffrey Fript, or Ed Cummins, you aren't buying squat in Houston MSA. They own all the multifamily deals here. That's a fact. That's one of the major benefits paying $10k+ to join a mentorship group. Brokers will take you more serious and send you off market deals. You can also leverage other students in the group as partners by leaning on their experience as well as raise funds for your syndication with them.
This is what will happen when you go on your own without leveraging other people's credibility and experience:
You: "Hey, my name is Hunter and I'm looking for value add properites"
Most Likely: Broker doesn't even respond
Possibly: Broker: "Ok great! Send me a proof of funds and I can show you some of my available deals"
You stay persistent and stay in contact with them. They get their deals and shop them to all their VIP buyers or previous buyers who they know can close. If the deal makes it past all of them, it's probably not a good deal, then they'll hit you up and be like "OK, you keep asking for a deal, here's one. Now close it or stop wasting my time." You underwrite it and it needs to be 20% lower than asking. You tell them that. You get blacklisted and they tell all the other brokers you're a tirekicker and you never see a deal again. Time to move to another market.
^ That might sound dramatic, but its very real.
Also, having all the education set-up in a curriculum and mentorship and connections with other syndicators will short cut your curve by probably 10 years.
2) Invest passively as a LP in 2 deals ($50k per deal). Learn how the syndicators do what they do. Analzye how they communicate, how they execute their business plans. Take in what you like and don't like so you can tweak it when you syndicate.
3) Network, Network, Network until you build strong relationships with some syndicators (This takes time). The goal is to be able to KP on a deal. Unless you have a ultra high net worth or ultra high liquidity, you will need an inside relationship with the sponsors to let you sign as a KP since they are limited to 2-3 KPs.
4) Once you have KP experience under your belt, your next step is to be a GP on your own syndication.
So its up to you to decide which is the path you want to do.
Best of luck,
Adriel
