All Forum Posts by: Jeff Cichocki

@Samantha Ruiz, those comments are real and accurate. They are the reason I said to be careful. There are guys with little to no experience out there that have built up some pretty big portfolios in just a handful of years. When people see massive success in a short time period, they forget that experience matters in a down-turn; and we're definitely headed for one.

Not all crowd funding and syndication is bad. Some of it is really good. You just have to not let your greed button get pushed by the wrong people and get into the wrong deals.

Stay safe and work with good people who want to help you succeed.

The meetings for most REIA's are very consistent on their meeting days and time. They are almost always the same day & time each month at the same location (special events can cause a variation occasionally).

Syndication & Crowd Funding can be great passive investments. However, like anything, you still need to pay attention. Most syndication's don't report properly or frequently enough. Most are run by people/teams with great intentions but aren't always the best at details. Get sample reports from them so that you know what to expect. Make sure you check their track records and length of time in the business. Syndication's are all the rage for apartments right now. It's not that they are bad, you just need to be careful. No one cares about your money as much as you do. And if you don;t care enough, neither will they.

I wouldn't hold of on a mentor. A good mentor can help guide you through the maze and help you get to where you want to get to sooner. A mentor is not always someone that you pay. Sometimes they are friends/acquaintances you meet at the REIA's. You'll know a good mentor when you see one because they ask more questions than they give answers. A good mentors job is to get you to think and make decisions. They will help educate you as well, but getting your head straight is the first thing you need to do.

@Marcus Auerbach is 100% correct. Lending for new investors is not a good idea. It takes time to develop and hone your skills before you take on a risk like that.

With that being said, you're asking about borrowing. Understand that it is risky for most people to be lenders. As the investor/borrower, it is your responsibility to make sure that you understand lending completely and how to properly document it so that your lender is properly secured in the deal. Unfortunately, I've seen and helped clean up a lot of loans for others that were not done right. They were done with the best of intentions, but still not the right way.

Here's something to ponder... Has a real estate investor ever found a property that they wanted to buy and thought to themselves... Man I can't wait to lose money on this deal? Of course not. That's not a normal thought. Every single investor I know thinks that every deal that they make an offer on is a good deal. If it wasn't they wouldn't make the offer. The reason I point this out is that because as a new investor, you are more likely to borrow money from a friend or family member with the best of intentions and completely convinced that the deal will work out only to have something go wrong and your lender gets hurt. Unless you're dealing with a seasoned lender (which will likely carry higher costs to you) who knows how to analyze the deal properly and can deal with a project that goes sideways, it's high risk for you and the lender. 

The best way to mitigate the risk is to get a mentor. There are mentors at every level. Some will help you for free and some will want to charge you. Despite what others say about paying for mentors, you get what you pay for. And there's a lot of bad advice floating around. There are a lot of videos on YouTube that you can watch for free. Unfortunately, I've seen a lot of free videos that give out absolutely horrible advice that will get you hurt. They give that bad advice because they are doing it themselves and haven't gotten caught yet, so they think it's OK. Morals, ethics & laws need to be learned. Just because I drove 120 MPH down the highway without getting a ticket doesn't mean I didn't do anything wrong. A good mentor will keep you from getting into trouble. A good mentor will help you make sure that the project goes as planned. Start with your local REIA to find one. I'm not against the national guys per se (they're all good for something - some are just good to watch so you know what not to do), but local guys know the local market. What's works in one state may not even be legal in another. Many guru's forget that.

I wish you the best of luck. If you need anything, please don't hesitate to ask. I hate seeing how many people fail in this industry when it's not necessary. This business is not rocket science, but it does take time to master.

@Michael Doyle, I've been investing for almost 15 years. I've been a lending for about 10 years. Between the two sides of our business, there's not a lot in the sfh market I haven't seen and done. There are a lot of ways to buy and fund deals. Many of them are unheard of by the average investor.

I tend to follow Dyches Boddiford, Pete Fortunato, David Tilney, Gary Johnston, Bill Cook, Jeff Watson and John Hyre. They are all mostly unknown in the guru space but very advanced teachers.

@Michael Doyle

Hi Michael,

IT love to meet up with you some time. I attend the Madison REIA fairly regularly and the Milwaukee REIA occasionally. Let's see if either of us will be attending one or the other in the near future.

@Ron S., it's a bank thing. It's very common among banks. It's not common in the private sector. Private individuals rarely care about the junior lien holders.

@Samantha Ruiz, there's really not a limit. If have investors I work with as low as 10k. I have several smaller investors who have a little more and a couple who have a lot of money to lend. The most important thing is the deal itself. If it's a good deal, someone will want to work with you.

I hope that helps.

@Kayla Marek, I sorry your having these issues. I truly am. The unfortunate thing is that no matter what you do, this pattern is going to continue. I think you should suggest that they hire their own professional.

I'm interested in what others have to say too. Hopefully others will chime in too.

Good luck!

@Samantha Ruiz, welcome to the family.

Investing can be overwhelming, especially when you're interested in so many different ways to invest. It makes it hard to really get good at any of them. My advice is to pick one and go after it. If you change your mind, don't worry about it, just switch. After you find the one you really like and have gotten good at it, then start adding in more avenues (don't go too fast).

Also, make sure you are hitting up the REIA's and meet-ups as much as you can. Hanging around like minded people helps a lot.

If there's anything I can do to help steer you in the right direction, let me know.

To your success!

@Betty Slinger welcome. I attend the Madison REIA and I'm planning to start visiting the Milwaukee REIA as well. I'd love to help in any way I can.

Looking forward to meeting you at one the REIA's.