All Forum Posts by: Brandon Flores

Quote from @Adrian Pedraza:

Congrats on the 700 bucks but that's not going to get you anything for marketing. I would actually suggest you spend that money to get your real estate license and hang your license with an e-brokerage. You need to be building capital and to do that you need to do deals that don't cost you any money. MLS should be your best friend for the next 18 months. Wholesale some deals, build capital, learn the business, and then move into paid marketing campaigns.

 Great advice :). I’ll finish up my license asap that’s been on my list as well I started taking marketing and business classes at my local college. 

Hello Everyone!

Marketing Strategies -

Hope everyone is doing well, I have a (quick) question to ask ! So I have recently come into a little money, about $700. Not a lot I know but I am a hard-working guy who just moved out at 18 and I am trying my best to get to where I want to be. I have tried Direct Mail before and received about two calls back and spent about $400 on materials. I made and mailed all my yellow letters by hand to cut and save on costs.

From this, I realized two things-

1. I need to make my mailing lists smaller because I sent out one big thing of mail only one time. When I could've lowered coverage and sent it multiple times to a smaller lead group.

2. Direct Mail is expensive, time-consuming, and doesn't have a high conversion rate based on the amount of money I'm spending as well as the amount of time I am spending sitting on Property Radar hunting for the leads. 

So I am thinking my next move since I don't like how well the mail performed,  is to try SEO. I have a website built already and it's been up just floating about in the space of the internet with no organic searches. I spent the time making the website and I pay to keep it running. So why not pay and have my SEO optimized, to try and generate organic leads?

I'm not simply just gonna put down direct mail either. I know in the future I should be mailing to get and yield the most leads possible. It would be nice to have my back-burner website cooking away a few deals though. I know setting up and getting my SEO done on Fiver won't cost a lot of money, so with whatever is left I am most likely going on a few paths.

My Strategies and plan with what I am gonna do- 

1. SEO- spend money on SEO to get the back burner deals cooking away. Try to get the website at least ranked 3rd in my area.

2.  Dirt cheap bandit signs around town about 150 placed and dotted around local zip codes with hot spots of interest/traffic.

3. The rest of the money will be put away and saved for a 5-time mailing direct mail campaign. Property Radar just released a new dirt mail system for the program offering postcards at .48 per and it's already linked to all my lead lists and properties I have found. I am going to shrink them all down into what I think are the best homes out of the lot and mail to them consistently.

That most likely limits all that money. I want to ask is this the best use of that money? Should I go all into direct mail or should I go my 25/25/50 on SEO, Bandit signs, and mail? As well I do know I need a way to handle lead flow. If leads start to come in and I am at work how do I handle them? I heard people say to use Google Voice and set up a mailbox to get back to the motivated sellers, but is there a better way to handle leads when they start to come in? If Google Voice is the way how would I set the mailbox up to handle the leads other than leave a message and I will get back to you? That seems very unprofessional like I'm not with my phone ready to help them with their home sale. It also seems like the leads may pile up too high for me to handle sorting out the bad from the good leads.  Any help on the subject would be very helpful :)!

Bottom Line-

I am a young guy and the first deal really will change everything for me. I am still super excited even after about a year now of learning and entering into the community, yet to achieve a wholesale deal. Please any advice on my ideas or changes that may benefit them would be greatly appreciated and I appreciate the time you took to read this.

Hi, Sigyfredo how are you doing today?

My name is Brandon Flores and I am doing somewhat the same thing. I am an 18-year-old wholesaler I am working on getting my realtor's licensee online as well. If there is any advice I could provide from what I've experienced so far is never to give up. The markets have been terrible recently and as a wholesaler trying to find a deal is hard. You can't let bad patches put you down and try to move on to the next thing.

Building as an investor in the real estate world takes a lot of time from what I've heard listening to podcasts and reading forms. All I can say as advice is to be ready for the worst and always account for the worst. Always try to look for the worst-case scenarios and ask yourself self will you still end up on top if this all goes sideways in a deal. If you don't think you can end up on top if all goes wrong and you and don't leave enough wiggle room in the deal it's most likely not a deal. Your offers for investment properties should be almost laughable. Have exit strategies in case things go wrong and always have a backup plan in case it doesn't work out.

As a realtor you cannot act fake, you need to be excited for all the people you help sell homes for you cannot put on a fake persona every time you try to sell a property or you will most likely end up unhappy. As a realtor who will be working with investors, you should take some time and try to learn the investment side of the real estate world. I'm pretty sure BP has an article about realtors working with investors that is definitely a good thing to read up on.

other than that be ready to spend a little money, be ready to run comps, and re-hab "numbers"  on properties for your investment side all around just prepare yourself and soak up as much information as you possibly can because learning the realtor side of the real estate world and the investment side are two, I wouldn't say completely different things but there is a lot more information to stack on top of the realtor knowledge.

Hope this helps and if you have any questions please feel free to reach out :).

Quote from @Eric Fernwood:

Hello @Lei Li,

You will buy a specific property in a specific city within a state. So, I recommend focusing on the city level. As there are too many cities to evaluate, I recommend selecting a city based on your financial goals. In this case, I will assume your goal is financial freedom.

Financial freedom is more than just replacing your current income; it's about maintaining your current lifestyle for life. To have lifelong financial freedom, you need a passive income that meets three requirements:

• Rents outpace the cost of living: Inflation consistently erodes the purchasing power of a fixed amount of money. For instance, if the inflation rate is 5%, what you can buy today for $100 will cost $155 in 10 years. If rents fail to pace with the cost of living, your financial independence will be short-lived.
• Income persistence: Your rental income will last a long time, which means that you will not outlive your income.
• Income reliability: You can count on receiving the rental income every month, even when the economy is doing badly.

Rents Outpace the Cost of Living

In real estate, prices and rents are determined by the imbalance between the number of buyers and sellers. When there are more buyers than sellers, prices and rents increase. If there are significantly more buyers than sellers, prices and rents will rise quickly enough to keep pace with the cost of living. Rapid rent and price growth only occurs when there is sustained and significant population growth. Which is our first city requirement.

✅ Significant and sustained population growth.

Income Persistence

Lifelong financial freedom depends on the future economic growth of the city where you invest. The best indicator of a growing economy is job creation. What are the conditions that attract companies to establish new facilities in a city?

✅ Low operating costs 

✅ Pro-business city / state regulatory environment 

✅ Low crime rate 

✅ No rent control of any kind 

✅ Sufficient population to have economic stability, major highways, and a major airport. 

✅ Low risk of a natural disaster

Income Reliability

The reliability of your income depends on the tenant who occupies your property and their job. I will discuss income reliability in another post.

City Selection Requirements

Below are the location requirements we previously determined. If a city does not meet all requirements, eliminate that from further consideration.

✅ Significant and sustained population growth.

Sustained, significant, population growth. Never invest in any location with a static or declining population Wikipedia

✅ Low operating costs

It's not about how much you gross; it's about how much you net. When selecting an investment city, it's important to take into consideration all major recurring costs. The largest operating costs for investors are property taxes and insurance. Below is a comparison of property tax and insurance costs for three states that do not have a personal state income tax. Sources: Insurance - ValuePenguin, State Property Tax Rates - Rocket Mortgage.

To illustrate the impact of taxes and insurance on net rent, I compared the cost of property taxes and insurance on a $400,000 property in the three states. (Remember that these are state averages, and individual cities may impose additional taxes.)

What does the difference in overhead costs mean to you as an investor?

• To compensate for Texas' higher operating costs, a property in Texas must generate $5,700 ($9,194 - $3,494) more in cash flow annually than a property in Nevada.
• To compensate for Florida's higher operating costs, a property in Florida must generate $2,123 ($5,617 - $3,494) more in cash flow annually than a property in Nevada.

✅ Pro-business city / state regulatory environment

A good indicator is the State Business Tax Climate Index. High state business taxes are a strong indicator of an anti-business environment.

✅ Low crime rate

Never invest in any city on Neighborhood Scout’s 100 most dangerous cities list.

✅ No rent control of any kind

The fastest way is a google search such as, “Is there rent control in Las Vegas Nevada?”

✅ Sufficient population

Only invest in cities with a metro population greater than 1M. Small towns may rely too much on a single company or market segment. Wikipedia

✅ Low risk of a natural disaster

Natural disasters like tornadoes can destroy entire communities. The devastated community may take years to recover, or it may never fully recover. When someone loses their residence or job in a disaster, they immediately move to a location where they can live and work today. So, even if your insurance company rebuilds your property, there may not be anyone to rent it. However, you will still be responsible for paying the mortgage, taxes, maintenance, and insurance. The cost of homeowners insurance is reflective of the risk of a major natural disaster. Therefore, do not invest in any location with high homeowners insurance rates. Insurance - ValuePenguin

In Summary

Start with all US cities with a metro population >1M (Wikipedia). Then, I would vet each city against all the other listed requirements. Eliminate any city that fails any metric.

I would add one more requirement: an experienced local investment team.

Local Investment Team

Everything you learn from podcasts, books, seminars, and websites is general knowledge. But you will buy a specific property, in a specific location, subject to local rules and regulations. The only source for the local knowledge you need is an investment team.

Working with an investment team usually does not cost more than working with any other realtor. For instance, we have delivered more than 480 properties and only charged our clients fees for four or five properties, which was due to exceptional circumstances. In all other cases, the fees were paid by the listing agent of the seller, not by our client.

Also, by working with an investment team, you receive a master class on real estate investing at no cost to you.

This was beautiful! Really great read with a lot of useful information !

Hello!

I have a 60,000 sq. ft. lot with an old, outdated, and really bad house that needs to be torn down in order to build a new home. The seller is asking 400,000 for the house that sits on the big lot. If I demo the old home, split the lots into two 30,000 sq. ft. lots, and build new homes on both lots that will sell for 600,000 a piece is it worth the 400,000 asking price?

The build price of the homes will be around 230,000 plus 200,00 from purchasing the original home that will get demolished. This will put us at 430,000. Plus a holding cost of maybe 3,000 a month over probably 6 months is 18,000 as well as %3 commission on 600,000 is another 18,000. So 36,000 more will put us at 466,000. Let's say a closing cost of 2500 will take us to 468,500. Demo costs of the house will be around 15,000 and for any ballpark shenanigans that may arise setting an extra 20,000 to the side.

This will put us at 503,500 for the brand-new home to sit on the lot. The home is going to be most likely a 4 bed 2 bath home near the freeway and next to all the good spots in town, Costco and Target a mall are on the other side or down a short way on the freeway. The movies are in equal lengths away both ways it's in a prime spot. So even if the investor comes up 550,000 per house all said and done and I really if I ran my numbers wrong they can get at the very least get 20,000 in profit if they still only sell the home for 570,000 give or take because I know commission numbers can change.

Yes, it is a lot but I would very much appreciate some feedback on the numbers. This is a wholesale home and my fee is 5000 tacked along in there which may change my asking price. Houses based on comps nearby on small or big lots, around 2000 sq ft for the home and 4 bed 2 bath homes. If you are interested in the deal please contact me! I would be happy to sell it to a member of bigger pockets but if you are not here to buy some simple input would be greatly appreciated :)!

Thank you

Yes! I am actively wholesaling with my marketing on the rise should be generating lots of good leads soon, very excited for it! 

Hi there! I would look into joining a REIA if you have the funds to do so. It will connect you with the people you are looking for. Also just look for investors in bigger pockets and try to strike up a conversation with them. I am sure if an investor sees what you can bring to the table they wouldn't mind sharing and talking about some of the topics you are interested in. Hopes this helps !

Hi there. Where I am located in the Antelope Valley would be a good place to buy rentals you can pick up a 3 bed 2 bath house for anywhere from 300-500k. The Antelope Valley is a great place to purchase rental properties! Not only because the military plant 42 alongside NASA, Northrup Grumman, and Lockheed brings in people that come and go out of the area, but also about a little over an hour from the center of Los Angeles. Great place for families just starting out and needing a rental home for a little while. Whilst also being in your price range for a home. This area is starting to grow as freeways expand and vacant lots of land prices are starting to gradually increase. Hope this helps :)!

Try meetup.com, and look up your local REIA's, You could even get in contact with a few agents look at a few open houses make friends with the agents, and see if they can point you in the right direction for meetups! Hope this helps.