All Forum Posts by: Chris Lemire

We are so blessed. God does amazing things!

We'll be attending Flip Hacking Live again (and speaking for a bit) this October 10-12 in San Diego. Here's the BP event page. Hope to meet some of you there!

https://www.biggerpockets.com/forums/521/topics/731508-flip-hacking-live-learn-from-multimillion-dollar-businesses

@Bob Jones Hmm... That's quite the challenge. Haha

So at a high level, marketing is:

1. Get a list of potential customers. In our case, people with houses to sell.
2. Sending ads targeted to that audience, with the goal of generating business.

So in our business, we have the budget to pay someone else to generate the list of potential customers for us. We purchase a pre-built list from a 3rd party provider. When just getting started, or on a much tighter budget, you could generate this list yourself. You'll hear a lot of people mention things like "driving for dollars" which is just driving around an area looking for houses that look like someone should buy them. That's one example of generating your own list, but you could also search public records, run lead generation advertising on facebook, google, your website, etc. The goal here is just to generate a list of "potential sellers"

Once you have your list, you use it to target your advertising. The trick here is that some forms of advertising will work better in some markets than others. To again use my own business as an example, 90% of our deals come from direct mail. In other markets, direct mail might be completely dwarfed by Pay-Per-Click (PPC) ads on google or facebook. Some of this is going to be trial and error until you figure out what form of marketing works best for your target audience in your target market.

Again, this is something like the 10,000 ft view, and you'll learn a lot more as you get into the details. I don't have a book I could recommend for marketing advice, most of what I've learned has just come from networking and asking what's working for other people in my area, or for the people in the groups I'm a part of.

For sales books, I like "The Ultimate Sales Machine" by Chet Holmes and Jay Conrad Levinson, and then there are other books focused on specific sales styles.

I'm sure there are a ton of other books people can recommend, and browsing the forums you can probably find a lot of other advice from similar questions.

Hopefully that helps a little

@Jay Samet I'd probably just get a referral from another investor in your area. If there is someone you trust in your market who is working at some degree of scale, they are likely to have used hard money at some point and can point you towards a company they know performs.

We've worked with a few different hard money lenders in the past, and their quality varies wildly, so getting a warm referral goes a long way towards building confidence for all parties involved.

Another good referral source are the established wholesalers in your market. If there's a hard money lender they won't accept when a buyer submits an offer, that's a huge red flag to me.

@Bob Jones Depends on how you like to learn. There are a ton of books on sales strategies and negotiation. You could also pay a sales trainer/coach to train you or your team. After learning what you can from books, a lot of it ends up being learned from experience. The more you practice, the better you get at it.

Same concept for marketing.

@Timothy Vigneault To your first question, wholesaling is a marketing and sales business. Depending on how competitive your area is, you might be able to pick off a deal here and there without it affecting your school work, and later your day job. Just remember that wholesaling is a business you're building. It takes a lot of work up front to get it off the ground. 

For your second question, most areas have a real estate meet up or REIA where you can meet other local people in real estate. If there isn't one in your area, you can try starting one. You can try searching BP's events, facebook, meetup, etc to see if anyone has some local gathering posted.

Hello @Eric van Dalen,

With our rehabs, the contractor funnel has been the biggest headache. When just getting started with a new contractor crew, we never give them more than one property at a time until they earn it. We have had great contractors who could handle one job at a time, that choked when trying to keep 2 running smoothly. We've also had contractors who could handle 3-4 at a time. It varies wildly by how mature the contractor crew's business is.

We've also had contractors steal materials, take draws and walk away, use our draw to pay for someone other project, or provide such poor quality work that we had to pay another crew to tear it out and start over.

It's not all gloom and doom. Our business is extremely successful. My point is just that finding a reliable crew that you can count on takes time, so I would take it slow getting started, so you have time to vet your crew and see what they're capable of.

A good crew makes or breaks deals in my experience. Deals are easy to find. Money is easy to find. A good crew is hard to come by, and worth its weight in gold.

@Raven Washington Hello!

The basics of wholesaling are exactly like the basics of buy and hold or flipping. In the beginning it's all about getting used to the numbers.

I assume you understand the high level concept. When you have a contract to purchase a property, that contract has value, and when you are wholesaling, you are selling that contract to a 3rd party. To be successful, you will have to find incredible deals, so that there is enough room for another investor to purchase the contract from you, and still have margin left to hit their numbers.

The easiest thing to do is to work backwards from the 3rd party investor's point of view. If you were buying this property as a rental, how much would you be willing to pay for it? How much would you need to put into repairs to get it up to par? Etc. Same thing for a flip, how much would you be willing to pay for this property for a flip. Once you know how much you'd be willing to pay as an investor, and you know how much you want to make for your own profit, you can work out what any property is worth to you as a wholesaler.

After you get used to wholesale valuation, the rest is pure marketing and sales. You will literally be building a marketing and sales machine to sift through as many leads as needed to find those incredible deals with enough margin in them.

Wholesale is one of the most active real estate business out there, so keep in mind that you're building a business and treat it that way. Especially in the beginning, it's much more time intensive than most other forms of real estate.

I wish you the best of luck! 

@Emily Hinkebein

Hello! Sounds like you are on the right track.

In my opinion, all investment starts the same way, regardless to the path you'd like to go down.

It starts with accounting. Taking a good look at your average income and average expenses gives you a baseline to build on.

Starting out as an agent has its advantages and disadvantages. One big advantage is that it is truly uncapped income. You work more, and do a great job, you make more money. One downside is obviously the spiky income when you're just getting started.

But yeah, if you haven't already, try to get a good average for your annual income and expenses, then take a look at your expenses and see if there is anything else you can trim without it affecting your quality of life.

You're on the right track with the "pay yourself first" concept, so along with the income you're setting aside, you can set aside any additional money from expenses you trimmed as well. 

The first fund everyone builds is the safety net. The safety net is typically 6 months to a year of living expenses. This safety net gives us the freedom to take calculated risks to accelerate our growth.

Once the safety net is in place, we build the second fund: The war-chest.  The war-chest is money you set aside consistently for the sole purpose of making more money. It does not matter how much or little you set aside for this, it just needs to be consistent and it will grow. Once it reaches a certain point, you can begin taking calculated risks with it in exchange for a return on your investment. 

In our case, we consistently reinvested those returns to take advantage of the compounding, instead of adjusting our lifestyle. So despite consistently increasing the income we generate over time, our lifestyle (and our expenses) didn't change much, and we just dumped all that extra income straight back into the war-chest.

We are not the type of people to tell you to sacrifice your happiness to save a few bucks. But I would tell someone to mercilessly cut anything that isn't important to them until they've built their safety net, and I would recommend funding the war-chest in the same way, because it makes a huge difference over the long run.

@Adam Britt

The first step towards any meaningful investment is accounting.

Where are you right now. What resources do you have. Where do you spend those resources. Is there a better place you could be spending them?

Once you know what you have to work with, and where you're currently spending money, you can sit down and decide for each item:

1) How much am I spending on this every year (e.x. cable TV)

2) Do I think it is worth it?

If the answer to question 2 is no, trim it.

If the answer to question 2 is yes, move on to the next item.

We did this for everything in our lives, and by doing so, we drastically reduced our monthly expenses without sacrificing our quality of life.

At the same time, we worked hard in our professions and did everything we could to get promotions and raises.

This combination of actions allowed us to increase the gap between what we were earning and what we were spending, and this gap is how we slowly filled our war-chest, to begin our real estate adventure.

It does not matter where you start. What matters are the actions you take each day to get you closer to where you want to be.

@Sunny D. 

We are not CPAs, so that's a better question for them.

We are an LLC taxed as an S-Corp, but the ideal structure for you and your business will vary based on your specific situation. It's really worth spending the money to consult a CPA, who will take a look at your situation specifically and advise you of your options.

1) You'll get better tax advice

2) You can focus your attention to other income generating activities instead of your tax structure