All Forum Posts by: Hayden Lyon

I think that’s a great idea. One of the biggest hurdles when my wife and I first started was helping her understand the power of real estate investing. What came “easy” to me was not easy for her (probably cause I’ve been a long time BP user and she hasn’t). I think she and many other women will get tremendous value out of this! Feel free to PM me and let me know the details if anything gets scheduled.

@Bob Persichetti congrats on getting started. A team, or having people you can trust as you get started, is definitely important.

Reflecting back on my first deal, I wish I had the following people in my network (no particular order):

1. Contractor: obviously if you plan on doing any sort of work to the house, it’s extremely helpful to have someone in your corner that has done it before. For me, I was much more comfortable making an offer on a property when I knew what my contractor could do and what he might charge. Over time, I could walk a house knowing his costs and make much better repair estimates, thus smarter offers. He also has an eye for layouts and how we may be able to configure a room if you’re doing any big work like that. He also has a network of subcontractors that would take years for me build.

2. Lender(s): unless you pay cash, you’ll never close a deal without a lender! Reach out to anybody and everybody in your area that does lending. No lie, I googled “banks based in Texas” and called every single one of them to see what they offer. I’ve built a few strong relationships who I can trust to help me close quickly.

3. Agent: unless you’re an agent yourself or have access to the data, having an agent on your side is important. They’ll give you access to the properties and provide comps that help you make informed decisions. I’ve got a few in my corner that have helped me along the way.

I’m sure others might be able to give more insight based on their experience, but when I first started these few have helped tremendously. I’m finally getting to the point where I’m connecting with accountants and attorneys to help with the “business” that I’m trying to establish and grow.

Hope this helps!

@Michael Morin The HELOC is a great tool to use to get started, either for your down payment or as funds for anything else you may need, like renovations. I think it all depends on how much risk or leverage you are willing to take on. I personally don't feel comfortable being 100% leveraged unless I know there is enough equity to cover my behind if something goes wrong. I have a HELOC on my primary residence that I use to get the renovations started on my BRRRR projects, but am quickly reimbursed by my lender as part of the construction loan that I use to fund my purchase and renovations. What that ultimately means is I pay 4.5% on the drawn HELOC funds (averages about $30-40/month if it stays drawn that long that's actually paid with HELOC funds) until my draws through the lender are complete, to which I turn around and pay back the HELOC to a $0 balance.

I have nothing against the Wholesale model as I think it’s a great way to get started and can be tremendously successful as you scale. While I’m on a couple distribution lists, I’ve personally never purchased from one simply because the spread wasn’t there and none have ever met my buying criteria. Like most will advise, don’t take any numbers provided at face value. I’ve seen several properties come across my inbox with flat out wrong comps and estimates. Due diligence is key!

My issue is most often with unethical behavior and complete misrepresentation to the seller/listing agent when getting to or going under contract. I’ve lost deals because the seller was told one thing, but turned out to have a different experience. At the end of the day, the seller gets their money, wholesaler makes their money, and buyer gets a “good deal” so maybe I’m just sour grapes!

@Alex Grosvenor Appreciate the reply and all great points! I've not pursued any wholesale deals and have been quite passive with finding deals. With that, I have been able to find a few deals in 2020 off the MLS that have turned into successful BRRRR's. Interesting you say that because that's actually what I've been doing! My last property was actually one that was listed for 6+ months. It's funny though, how a listing will sit dormant for months, but as soon as I make an offer, another two or three follow, and I lose the deal. Maybe it's coincidence or maybe I'm being followed! lol 

I hardly even try to go after the day one listings anymore because everyone has the same notifications I do, and I can't compete with the big cash buyers and multiple offers that come in an hour after listing. Don't get me wrong, I still make the offer, but it has not been nearly as successful. I can close quickly, but it's not with cash.

I think you're spot on with how to use my time wisely. If I'm being honest, I did not think 2020 would be as successful as it was (chalk that up to not having big enough goals!) and I was not as proactive as I plan to be in 2021. So now I'm going in to 2021 thinking about how we can make it better. I think that starts with every point you made above!

Given we have limited time and sometimes limited funds, we (my wife and I) are exploring ways to source more deals. Part of that approach is to network and be very targeted in our pursuits (i.e., one zip code, one demographic, one property type, etc.). Since we don't have the time, nor the funds, to do what the larger wholesalers do, we have to figure out what we can do that will differentiate us from them and still be able to compete.

I've also not networked nearly as much I should, so I'm not connected with wholesalers other than the big players. Hopefully the next few weeks/months will result in a few more connections. 

@Joseph Hammel @Nathan Gesner Congrats on a great 2020 so far! Still a few days left in the year to make it even better!

It has most certainly been a busy 2020 for me as well, starting from the very beginning. Three successful BRRRR's, first one closed on January 2! All now refinanced and rented with cash flow $250+/month. I also welcomed a new baby in June, so you all know how crazy that can be! Setting goals, getting ready for 2021, and hunting for the next purchase.

And let me also add to @Bruce Lynn's comment. The information in some of the wholesale distribution packets is flat out wrong. Always do proper due diligence! I have nothing against wholesalers, but it sure does hurt when you lose a deal to them (them being the large wholesalers in the area that anyone in DFW is probably a recipient of their properties). I've lost out on three deals in the last month or so to the same large wholesaler, received the distribution, and thought immediately to myself, "who in their right mind would buy that deal at that price point???" 

I know there are differing opinions on wholesalers, and I've never personally bought from them because of my point above, but I've seen firsthand what I believe to be unethical behavior and misrepresentation with a seller of a property I was looking to acquire. If there's one with that experience, there are probably many more! I have nothing against the wholesale business model, but I do have serious issue with unethical behavior that is directly effecting my ability to compete and acquire properties (or maybe it's sour grapes, and I don't like losing!).

@Chad Rakestraw I 100% feel what you're going through. I'm definitely a small fish in a big ocean, work more than a full time W2, and have 6 month old, so time can be very limited. I have been able to find a few deals in 2020 off the MLS that have turned into successful BRRRR's though. Scouring Zillow, Realtor, MLS, etc. is not a practice that will scale quickly, but it is most definitely the easiest (and also most competitive) if one or two deals a year is what anybody is going for.

I say this because we appear to be in the same boat! Given we have limited time and sometimes limited funds, we (my wife and I) are exploring ways to source more deals. Part of that approach is to network and be very targeted in our pursuits (i.e., one zip code, one demographic, one property type, etc.). Since we dont have the time, nor the funds, to do what the larger wholesalers do, we have to figure out what we can do that will differentiate from them and still be able to compete.

@Mike B. I've had success using Zillow and have not experienced the bugs you're talking about. I have had an issue with a scammer trying to use my property on Zillow to get money from "potential tenants"! My only issue with Zillow is the new pricing model they've implemented. It's only $10/week, but it's important you price the rental correctly, or you may find yourself spending more than you anticipated. Typically the first listing will be free, but any listing after that will be charged weekly.

@Steven Foster Wilson as much as I read the forums, I should've expected an Ohio callout! The Texas pride in me will never agree with Columbus, OH being a better place to live than DFW, but I guess the data shows otherwise! If I had the confidence to invest OOS, Ohio would be one of the first places I'd look at.