All Forum Posts by: Jesse Chunn

If I were going to invest 10k, no matter if I borrowed on a credit card or had it in the bank, I would probably just find one flip deal, find a money partner (maybe on this site?), use the 10k as "skin in the game" with the partner, and do the deal with YOU as the buying agent when you get in, manage the renovations/contractors to earn your slice of the profit, and be the listing agent when you get out (maybe even at 2% to make your partner happy). You will probably get most or all of your 10k back on that one deal just in commissions and maybe a finders fee if you're lucky. If you did it right, you should also have at least a few thousand in profit from the flip. All in about 2-3 months. Now you have built some connections, you have investing experience to talk about, you really understand the costs and effort involved, you have some cash to play with, and presumably during that time you were lining up your next deal (or 2 or 3) and are ready to do it again, and again, and "grow" into the business you are interested in doing, while also growing your bankroll and your network.

At 19, your mind is probably going faster than reality will allow you to go. I would never want to hold back enthusiasm, but 2-3 months of patient grinding is probably what you really need right now (what I would give to be 19 again). The last thing you need to do is invest (or borrow) 10k into mail that is probably going to be very frustrating and slow, if it generates any leads at all. Most direct mail takes 3 or 4 rounds before you start to see results, so that could be months. Go out and just start talking to people. Join a local Toastmasters and talk about what you are doing. If you go to church, there is another source of leads. Check out local meetups and just talk, talk, talk about what you are looking for. It won't take long to find a deal worth doing. When someone says "Hey, I have a house I need to sell..." then you listen, and don't let them out of your sight until you either have a deal or know there is not a deal to be had.

By the way, I am a Realtor in Arlington, TX, but I hope you won't hold that against me. I am also an investor. One good contact is all it takes to get the ball rolling. Some nice lady whose husband just passed away and needs to sell the house as-is quick. An angry husband going through a divorce that is ready to sell the marital home right NOW so he can move back to Nebraska and grow lima beans. A probate lawyer that has a client/executor that needs to liquidate the house of a hoarder for out-of-town estranged kids. A part-time out of town landlord that has had it up to here with those dang renters. You never know where a deal is lurking. Talk. And listen. And act.

Anyway, those are my thoughts. Maybe I got carried away.

@Account Closed Thanks for the input. To be honest, when I noticed that it was there a few years ago I was somewhat surprised that it could even survive in that location. I'm not so concerned about something else opening right there, but I can see a town 2 or 3 exits down the road getting a sudden growth spurt and raining on my parade. I don't think this is something I want to get into, but I thought I would poke around a little and see what I could find out. This motel stuff, especially out in no mans land, sounds like it has a lot of potential to become a nightmare with very little room for error. I can imagine Norman Bates at the desk, a flickering vacancy sign out front, and maybe even a kid playing a banjo 'round back.

@Ash Patel I don't really see this as "remotely" running the Motel. I would be living nearby and could reasonably visit the location daily if necessary. In fact I would necessarily drive right past it on at least a weekly basis just to get to Interstate 40. I am assuming that I would be there on a nearly constant basis for the first month or two until it was up and running smoothly, and then ease out of the day-to-day as I became confident that it is in good hands. Getting the PIP list is a good idea that I wouldn't have known to look for (as an example of my lack of knowledge on the topic). It is pretty new. I drive past the location at least once a year for the last 30 years and only remember seeing it there in the last 2-3 years, so it is relatively new construction (of course I would get the construction date with the information package that I expect any time now). Thanks for the reply.

@Account Closed Thanks for the reply. I requested the info before I posted but it hasn't come back yet. I would investigate every exit between Memphis and Little Rock if I decided to get serious about this. I used to live in Memphis and traveled back and forth to Little Rock often. Before I go to all that trouble I wanted to get some rough idea of whether this is even something I want to consider. I am not so worried about the price, so long as I have the right "formula" for knowing what the price should be, which then leaves me with the easy task of negotiating to the "right" price. I am more interested in knowing what that formula is, and what things I need to know about Motels that is different from, say, apartments. For example, there is nothing big within 5 miles of this location... So this would mostly be a stop for people going long distances. Little Rock is less than 1 hour away, Memphis less than 2 hours away. Is that good or bad? Is 40% vacancy normal? High? Low? Is 40 rooms a good size given the need for full-time on-site staff? What are the unexpected expenses unique to Motels like this? Those are the kinds of things I am wondering about. Thanks again for the reply.

I wonder if someone with some hotel/motel experience would be willing to spend 3 minutes looking at the Super 8 Motel in the link below and tell me what they think? I am considering moving to the area where this is located (Hazen AR, also known as the middle of nowhere). I have zero experience with any kind of commercial real estate but I am just curious if this might be something to generate some cash flow while I do some SF flips and rentals. I don't know the technical terms, but basically I would be the "owner/operator" but would not work on site. I would be off doing flips and SF rentals during the day and check in on the motel from time to time. I would, I presume, hire a solid manager and relatively low-wage cleaning staff (other staff?). I hope I don't sound too awfully ignorant. I am roughly guessing I could easily net around 50k or so after all expenses, assuming a 60% occupancy, leaving me room to improve occupancy and get that number up above 100k or more (after loan service, 30% down). I did a basic analysis using tools meant to analyze MF apartment deals, so I probably missed some things. Anyway, I hope someone with some experience will enlighten me on some of the things to look for and whether this even looks workable. It seems like it could be. Here is the link:

Thanks for the input guys. I've been keeping my eyes open and have made a couple of offers on some apartment complexes. I have not found the right deal yet, but I'm confident I will. I am not in a rush, but I don't plan to drag my feet either. If the right deal comes along, I'll be jumping in with both feet.

@Sam Steadman

Thanks Sam! Very helpful. I hope some others will also chime in.

It seems like it would be advantageous to get a real estate license if you are a real estate investor. Presumably, the education involved would be helpful and you would keep a little more of your profit. What are the advantages (disadvantages?) of going to the trouble and expense of becoming an agent? Is it worth it?

Could you folks share some good ways to keep track of contractors, etc? As I start dealing with various individuals and companies, I am wondering how people keep track of who they have used, how good they are, how much they charge, contact info, and so forth. This seems like a key to long term success.

How are people usually compensated for raising funds. For example, if someone finds investors for me and raises, say, $300k for a down payment on a property that sells for $2 million (I bring $200k myself), how much would I expect the fund raiser to get at closing? I assume it would be a percentage, but what percentage, and are there other approaches besides a percentage?