All Forum Posts by: Joseph Gozlan

Are you doing anything to market it to investors in the DFW area?

What do you call East Dallas? Garland? Mesquite? As far as Forney?!

As @Jay Hinrichs said above here, something doesn't add up...

Risk is a relative term. What could be considered too risky for you would be normal for others. 

I agree with the people above me saying that your risk factor is directly dependent on the team on the ground. 

A few of ways to mitigate that risk are:

1) do serious research on the area you plan to invest. Don't buy off pictures, don't take anyone words for anything, trust but verify. Reach out to local RE clubs and ask for opinions about the neighborhood, the type of deals, expected cap etc. remember that there are local challenges you might jot be aware of such as flood insurance requirement or foundation issues (anyone said Texas?) etc.

I'd say even get on the road and get there. Nothing is better than your eyes. 

2) vet the team. If you go with a realtor, verify he/she are the top agents in the market.

If you choose a property manager, ask for owner references etc.

3) build in extra padding. Plan for some serious issues that would need your time, maybe a flight down once a year to inspect the condition of the property yourself. 

One last advice, trust your gut. If all the numbers add up and it looks great on paper but your gut tells you it's "something is off" walk away from the deal!

Good luck!

for me it was simply the best investment strategy. I grew up in a poor, single family household and worked my *** off to get my engineering degree. 

I worked for multiple publicly traded companies and learned the hard truth that the share price has NOTHING to do with how the company is doing business wise. It was all rumor based and speculations.  

I looked around, studies the many options out there an realized RE is the avenue I trust the most with my money. Simple really :-)

Good point @Ben Leybovich  

I'm not a big shot investor, don't own hundreds of units (yet) and after 7 years of investing, getting a realtor license and dealing with tenants; I just now feel I know enough to take the next step and get a small multi-family (under 75 doors)

Call me conservative, cautious, scared or insane but reading posts in this (wonderful) community of young, inexperienced wanna investors aiming at apartment buildings as first investments with 16K total cash reserves or questions like "how to start with no money at all?" Tells me that the RE market is way too hot and is due to corrections sooner than most believe. 

I have a de-ja-vu from the 2004-2006 party before the subprime blew up in everyone's face. 

Just my .02

That's the right attitude!

Good luck on your journey. 

hi Richard,

Welcome to the forum. Great community here with lots of knowledge. 

I have good news and bad news for you. 

Bad news: there is no such thing as investing in real east at with "no money". Even if you're in a terrible market where seller will do 100% owner financing you still need to be financially ready to the fact that day after you get the keys something happens that requires you to spend money. It could be a non-paying tenant that destroys the property, hail that damages the roof, storm that breaks a window, plumbing pipe that bursts inside a wall and soaks the carpet or as simple and the AC breaking down. 

Now the good news: the BP guys have a podcast!

Go back and listen to all 125 of them. You will learn a lot!

You will hear stories from real investors not "mentors". Some good some horror stories but all real world stories. 

Then go work you *** off, live like a student and save every penny you can until you have a good amount that can get you through a deal and keep you comfortable while doing it. 

Good luck!

Joe

Hi

I can try to answer some of these questions. I'll start with an a word of caution: "but someone told me it's OK on the forum" is not a viable legal defense!

You should take whatever advice you get for free online with a grain and remember that none of is will stand next to you in court if you get caught doing something illegal.

Having said that, the law is clear. You can do anything that doesn't require a license. The main 2 things I would consider violating this are:

A) Showing a property to a potential buyer (investor or otherwise) or engaging in any "selling" activity on behalf of the seller (as if you represent them).

B) representing a buyer when you engage a seller.

There are other things you shouldn't be doing but in my unprofessional opinion these are the two big ones.

Also, unlicensed assistant you mentioned is referred to in the context of a RE agent or broker. An investor assistant doesn't fall into that category.

Onto the other questions....

2) I've seen different pricing structures used by property managers. Some do fixed amount $50-$100/mo/unit), others do % of monthly rent (5%-10%). The important thing is really what you get for your money.

Many PMs don't do evictions. Some have their own maint. crew some just call in professionals and bill you and so on. So make sure you outline your scope of services and set the expectations with the owner.

3) see answer #1. Depends on what and how you engage the sellers/buyers.

4) helpful? Probably. Legal? See answer #3 (see a theme here?)

As for working for free/asking for pay, here are a couple of things to consider: most investors that have enough experience you could learn from will already have a PM.

Your offer to go inspect the property can be nice but I can get a drive by BPO done by a realtor with pictures and full CMA report for about $40-$50 so unless you go up in the attic, on the roof and into the house this might not be enough value for an investor.

Now that I gave you the ugly answers to the questions you asked, let's bring Mr. Sunshine back for a minute. What can you do that will be legal and useful? Analyze data!

There are so many potential leads all over the place that an avg. investor can't really analyze all of them fast enough. Craigslist, MLS, zillow, FSBO sites, street signs, newspapers, backpage....

Find some investors that will give you their preferences and start analyzing the data. You get a few things out of it:

1) it's way easier than climbing roofs and going into attics in August in Texas

2) you'll get to learn what the pros are looking for

3) you'll get good at finding deals

4) it's not illegal for you to accept payment for data analysis!

Sorry it came out so long, hope it was helpful.

Joe 

Not to hijack the thread but this is something i was looking into as well so I'd appreciate if I can add a few questions to yours:

Who determines who heads the board? is that an elections thing? If you buy the 2 units and there is an investor that owns/buy 20 of the 32 can they take over the board?

 Eric,

Getting your agent license is about $500-$600 and you can get it done in as fast as a week. It also comes with other pros and cons you might want to consider.

For example, access to MLS would be a plus. being help to a higher standard at court would be a con. check your local laws to know what is legal w/o a license and what is.

Taking advice or reading a post of someone from a different state is useless and sometimes eve dangerous!

What one can do legally in TX can get you big fines in CA. 

My advice would be to read your state laws and also go to a local RE investors club meeting and ask around. If it's illegal they will tell you immediately it's less competition for them :-)

Hi Carlitos,

First, congrats on the upcoming marriage. 

Now for a quick reality check; buying a house is great but once you move into it it's no longer an investment it's a liability!

So don't think about your primary residence as an investment. Trust me, you'll sink more money into it than you have planned for. 

Personally, I say get as much financing for your home as you can comfortably live with. Pay close attention to the word comfortably! Over financing beyond your comfort zone will prevent you from being able to save for your investment property.

There is one exception to the above limitation and I would highly recommend you look into it and that's buying a multi family and moving into one of the units (a duplex or quadplex). If you stay below 5 units you should be able to qualify for the conventional loan and this way you'll have someone else pay for your mortgage. 

Frisco has a few areas where there are duplex/fourplex properties and so does Plano, carrollton, mckinney, little elm etc.

With the market being insane as it is these days, there is nothing really on the market but you can do the legwork, find the owners and try to convince someone to sell to you.

Good luck!

Joe