All Forum Posts by: Matthew G.

@Jose Trujillo New construction is different than fix and flips. If you are just tearing down a home and building a new home on top of it then that isn't so bad. If you are building truly new construction where you have to coordinate with the city to get utilities to the piece of land, then there are a lot of variables that could exceed your planned budget or take longer than you expect. If you haven't done it before, you're just putting more risk on the investor.

A sprinter and a marathon runner are both runners, but they wouldn't excel in each others specialty. Just because you do well on flips doesn't mean you can do equally well in new construction. Stick to what you are good at.

@Nicholas Reyes You may want to expand your search to private lenders. Most HMLs have at least a minimum of a 50k loan. The interest rate, points and risk just aren't worth it to a HML if they need to foreclose on the property even though you would be within their lending guidelines (75% ARV).

@Jose Trujillo If you are a flipper and have the deal flow to support $1M and he wants to put it all into flips, then that is what he should do. If your area of expertise is flipping, I wouldn't try to tackle different investments for him just to try to diversify his cash. Be honest with yourself and what your strengths and weaknesses are. If you try to manage all his capital and diversify it in areas that you aren't familiar with, you could end up just disappointing the investor.

If you want to diversify his cash, diversify it in the projects you are working on. If you have a $1M flip, don't have him put up all the money for that one project. Spread his capital between your flips, so that he has diversification that way.

@Alex White It's not so much the tools but the team. If you can have a good team in any area you choose to invest, they will be more important, in my opinion, than just following the "best" place to buy. You might find a tool that tries to find areas that pass the 1% rule or some other computed measurement, but just because it passes this test doesn't give you the whole story. Every area would have its own pros and cons that you need to factor in when making a decision and you would only get this information from a team you can trust.

Another reason the team is greater than the tool for locating investment properties is that they will be the ones finding you deals. If you frequently invest in new areas because the tool you use says so, it's harder to build relationships and your network to find the good deals.

@Charles Kimber Any website that provides good quality leads would eventually get saturated with people using the same source and then drive down the quality of the leads. Leads not found on a list are probably going to get you a higher conversion and is better if you don't have the marketing dollars. If you have lots of money to burn then those leads off of websites could prove valuable because you can beat your competitors by marketing to the list more frequently.

With all the knowledge you’ve gained over the years it’s time to start planning. Start by figuring out your goals. Do you want to grow your wealth slowly and build passive income or do you want to make larger chunks of money and be more active?

Once you’ve figured out your goals you can work backwards and create a plan to get there. If you want 20 units in 5 years to meet your passive income goals, then create a realistic plan that achieves that goal.

Once you have your roadmap you can start filling out some short term goals to help you meet your longer term goals. Short term goals might be networking at X meetups per month or analyzing X deals per week.

Eventually with consistent effort you should start seeing more opportunities and be moving toward your larger real estate goals. 

@Eric Hamm I just started using an app called AirTable. It's more like an advanced spreadsheet rather than a dedicated CRM but they have templates to use it as a CRM. I've been using it to track marketing campaigns and was able to really customize it to my liking.

The cool thing about it is you can have different views like a grid view or form view. If you have an investor questionnaire you can send them a form to enter their details and it goes straight into your spreadsheet.

@Eric Brown You want to figure out what type of investing you want to focus on. Wholesaling, flipping, rentals, etc. Once you know your focus, it will be easier to recommend what type of lenders you should work with and what type of loan programs you can use to get started. In the mean time you should also be networking at local meetups. Talking to other investors at the meetups might give you a better feel for the pros and cons of the different types of investing you are considering.

@Khalisha Wilson That would be an ambitious goal. Wholesaling is mostly marketing. Your first step would be to find an area to market in that isn't overly saturated with other wholesalers. Once you find a suitable area, you can try to find a list service to get motivated sellers that reside in the area. If you want to complete a deal soon, try door knocking rather than sending direct mail. Once you can make contact, follow up and really show what you can do to help them.

@Fredrick Hock Your contractor is giving you just that, an estimate. The reason he might not be able to give you an actual fixed number is because in construction there seems to always be something unexpected once you start opening up walls. He could give you a quote for doing specific work, but there is always the chance that something else needs to be done that isn't part of his scope that he would just create a change order for.

You can't protect yourself from going over budget due to unforeseen circumstances, you just have to add a percentage for contingencies.

As far as keeping a contractors team on schedule, make sure you thoroughly vet your contractor. What jobs is the GC currently working on? How many in-house workers does the GC have? What work does the GC subcontract out? If your contractor subcontracts out most of the work, then he can have an issue staying on schedule because he is at the mercy of his subcontractors especially if he is hiring the cheapest labor to stay within budget. If he has an in-house team that is large enough, he can easily add more workers to speed up the project as long as he isn't spread too thin because he is working on multiple jobs.

If you hire a good contracting team that you can trust, you won't have to worry about micromanaging them. Don't hire on price alone, their price is usually the lowest for a reason.