All Forum Posts by: Jared Prevost

@Nicholas Mangiafico First off, congratulations on starting your career as a pharmacist! You're in a really good spot as a DINK (duel-income, no kids). Additionally, if your student loans are subsidized / unsubsidized loans, your interest is far less than inflation, so I wouldn't be focused on paying those loans off.

Here's what I think, I would encourage you to find a hard money lender that has a good reputation in town. Here's why, if the hard money lender is experienced and willing to sign off on the loan, then you know the deal is legitimate. (This is actually advice Brandon gave in one of his books on a flip that went poorly).

As far as the strategy goes, monthly furnished rentals (especially through the Airbnb platform) is my favorite rental strategy. You have responsible tenants, highly inelastic demand, the presence of healthcare drastically reduces vacancy risk, and you don't ever need to show units (tire kickers galore for nicer units).

Another plus with the BRRRR model is highly distressed properties are ideal. Now if you don't have reno experience, this can be a negative. However, the advantage is that you have more flexibility to position the property with nicer finishes and change floor plans to make the property more valuable (add a bathroom, expand the kitchen, etc). I think one risk with BRRRR is if you don't find a property at a good discount or with sufficient distress, you could do a full reno with hard money and then not see a high enough appraised value to address the loan.

One final thought on the question to leverage or save is that one of the most attractive aspects of real estate is how conducive it is to leverage. Unlike other assets and businesses, banks and private lenders will readily lend 60%-100% of the after repair value of the asset. Leverage is critical because it magnifies either your gains or losses - it's really a question of your confidence in the deal, your ability to execute, and your tolerance for risk.

Hi Blaise,

I used to do syndication myself, here's what I think. For one, you should really read, "The Hands-Off Investor" so you can a good basis for understanding what to look for in a sponsor and a deal.

Also, I personally like to work with people I know in my own market. I would go to meet-ups and start asking who the local syndicators are. If they're legit, they're going to have consistent deal flow and other people at the local meetups will have good things to say. I know a few sponsors in Grand Rapids who are actively looking to raise money, I'd be happy to refer you their way if you're interested.

Hope this helps!

@Nadine O.

I recently moved from Grand Rapids MI and I can tell you from a macroeconomic perspective, it's an excellent market to invest in. All 10 of the largest employers are in different industries, population growth of over 1% annually for the past few years and expected to continue, lots of small multifamily inventory, and really good submarkets. If you really want to invest in a cheap city, Muskegon is 40 minutes west of Grand Rapids on Lake Michigan and you can scoop up cash-flowing deals for $50k.

I previously helped manage an Open Door Capital mobile home park in Muskegon, if Brandon Turner is willing to invest there, it's probably worth looking into.

My problem with other midwest states, such as Ohio and Indiana, is that I don't see meaningful long-term appreciation. People are moving where there is a good lifestyle. In Michigan, you have the Great Lakes and a lot of beautiful natural areas and opportunities for outdoor recreation. (Keep in mind my Michigan bias... no one from Michigan likes Ohio haha).

I think the other considerations such as taxes, tenant friendliness, cost of living, etc are priced into real estate by other investors. I really don't find this info all that relevant - not enough to keep you in analysis paralysis.

@Janet Hansen It really depends on how you found this lead. If you drove past, I would encourage knocking on the door as opposed to doing a cold call. It is so much easier to build rapport knocking on doors and you can talk to the neighbors about the property to get additional information beforehand.

You can ask an indirect question so you don't come across as soliciting. I like to ask, "Hey, I was wondering if you knew of any homes for sale in this neighborhood - I was just walking through and it seems like a nice spot?" If they have any motivation they will probably let you know. If not, you can compliment their property some and mention that you'd love to buy a place like this one.

If you want to go for the cold calling route, I would call and use a script like this,

"Hey is this ___________? This is Janet calling, we haven't spoken before, but I drove past your property on XXXX Ave the other day and just thought to myself that I would love to own that home, I wanted to see if you had any interest in selling"

Let me know if this helps!

@Michael Mancuso

I graduated a year ago with a finance major, econ minor and was in a very similar situation my junior year asking the same question.

In my personal opinion, having your W-2 in real estate to start is fantastic as you get paid to learn real estate and build your network in the industry. I also interned for a developer and working in the development space can be very exciting, but doesn't always draw great parallels into the SFH and small multi-family investing world.

I think there are two approaches here:

1) Work somewhere in the development/banking with the highest base salary, this will really help you qualify for a solid first home you can house hack.

2) Work somewhere that is commission-based, but you can learn how to find good off-market deals and get creative financing so you don't have to get a traditional mortgage product. This would likely mean working for a wholesale company or as a realtor

If you're passionate about finance and want to learn about doing big deals, I would stick to the world of development. A lot of this will carry over to syndication if you ever want to go into that space.

Hope this helps! Feel free to message me if you ever want to talk

 @J RajYou've got a lot of good advice here to start off with, especially from @Marc Izquierdo @Nathan Gesner and @Steve Donovan

Speaking from my own experience, podcasts and reading will help you build a solid foundation for understanding the real estate concepts. However, to get into the weeds and the details, you need to find a way to get involved in the real estate world.

If I were you, I would look up real estate meetups in your area and start attending a few meetups nearby. Introduce yourself and let others know you're looking for a mentor and you're willing to work for free on weekends and evenings and let other investors know what value you can add (could be as simple as being boots on the ground or helping with tech). Once you get in the game and run what's it's really like to do real estate (leaking faucets, showing units, deal sourcing etc) you'll have much more confidence about doing it for yourself.

Hope this info is helpful! Feel free to reach out if I can be of any help

What's the sq ft on this place? I'm shocked you were able to do all this reno on just $34k... good for you!

@Gildas Dossa

I think this really depends on your financial position, income, and risk preference.

If you want to buy traditionally with a mortgage product, you should evaluate the worst-case scenario, the best-case scenario, and your most realistic outcome. If you can't stomach the worst-case scenario or don't have a strong enough financial position or income to get you through mistakes (likely to come early in an investing career), I might hold off for a while.

Honestly, my best recommendation is to start getting really active at in-person meetups. Tell everyone there you're looking for a mentor and you're willing to work for free in the evenings or on the weekend, ideally leveraging your real estate superpower (a lot of older investors could really benefit from some tech know-how or a deal finder). One thing I've found to be true is that older investors often want to pass on the torch and if you built a good relationship with someone, don't be surprised if they offer to sell you a property via seller finance or on a lease option.

Although this is a long-term approach, you will learn a lot via hands-on experience and you're very likely to build relationships that will lead to deals.

Hope this is helpful!

Hi Darian,

It's not hard to get people on your buyer's list with a simple FB post, however, the name of the game is getting high-quality buyers. As a wholesaler, you need complete trust that your buyer will execute as it's your name, revenue, and seller on the line.

I am a big fan of in-person networking. Go to a local meetup and ask who the serious buyers are, chances are you'll here the same handful of names over and over. I would also check references, call the title companies and wholesalers who have worked with this buyer before and see how ethical and honest they are.

Hope you find this helpful!

I think it's important to ask yourself what it means to be a "good" market... every market is good for something.

As a general approach, some solid macro fundamentals to look at include population growth, employment growth and type of employment/major employer diversity. I also look at the potential upside, is there a lot of distressed inventory that can be renovated? Is the city making any top 10 lists? 10 years from now, would you want to live in this city?

As far as Tampa goes, the metropolitan statistical area has grown by over 1% a year for 3 years in a row, which is very strong. Over the next 10 years, the Tampa labor market is expected to grow by over 40%, far exceeding the US average. All 10 of Tampa's largest employers are in different industries which is all fantastic.

On the topic of potential upside, Tampa has an impressive inventory of distressed single-family homes and there are no major geographical barriers preventing growth to the East or North. Tampa is also on many top 10 lists both for those looking to retire and for young professionals. As long as it doesn't go underwater, I don't have any doubts that Tampa will remain a strong market and see significant long-term real appreciation making it a solid market to invest in