All Forum Posts by: JJ Conway

@Alec Norman lots of good advice in this thread. I tend to agree with @Lynn McGeeinthat if I were in your situation I would sell it (and no, I'm not just saying that because I'm a Realtor lol). 

I remember when the market first crashed out here- my home was 40K upside down and we got transferred out of state. No biggie, I thought, the market will recover. It didn't. Two years later, my financial planner told me to sell it b/c it was 80K upside down. I resisted! After all, the market would bounce back and there's NO WAY I'm losing 80K! Well the market never did recover enough for that property and 9 years later it's 150K upside down. I've been told by two CPAs and even a JAG (military lawyer) to walk away from it. I won't (it's rented) because of my personal convictions, but this experience colors how I approach property now - even the ones I live in.

With that much profit to play around with, you could take the chance and see, as others have suggested, whether you like being a landlord. The biggest question I would ask, in this case, has already been asked: can you financially absorb the cost of that mortgage if the property is empty for 2 months between tenants. Will the profit you make be enough to overcome that hit to your bottom line?

If not, then even though this townhome could be worth double in 20 years, if I were in your position, I'd sell, take the 100K, and apply that to my future ("a bird in the hand...").

Hi @Aj Bowman

Like @Matthew Paul said - the contractor should be making good profit on the rates. If you were partners, might they do it for cheaper overall cost, sure - but you're giving away 50% of profits.

I did have a friend who partnered successfully with a friend who was a contractor, but he's the only one I knew who made that work.  Most people I know who did partnerships had a lot of stress when they stopped being on the same page.
  There are a lot of good REIAs in NoVA and MD and you can meet reputable contractors there who will give you quality work at a reasonable price.

Hi @Saima Qammar

I'm curious when you say you were "thinking about doing wholesaling in Richmond area but most likely will do in Northern Virginia like Herndon, Sterling, Reston areas," what's changed your mind? What's the appeal? 

Price points are quite different. Process is the same though: Build a buyers list. Prospect (you reach out to seller leads) and market (get them calling you). Get property under contract. Sell contract to someone on your buyers list. I just taught a wholesaling 101 class on this - do you have anyone local who can walk you through it?

Wish you the best!

Hi @Ashley Jenkins welcome!  I'm still in Springfield so you definitely made the move to a more "new investor friendly" area of the country!  My ex-MIL is an amazing woman and she's is in Durham (not far from you).  She built a multi-million dollar business one house at a time and is who inspired ME that I really COULD do this!  I suppose I could connect you and @Carmen Harris in touch with her for some informal coffee mentoring.

So excited for you!

I feel like real estate is a numbers game.  Let's say you put your goals on paper (for ex: I want to make 60K this year as a wholesaler), and you work out the numbers (that means 5K per month, which means ## deals per month, which... when I back it out... goes to ## phone calls) then you don't have to stress when someone tells you "no" because you know you're hitting your numbers and the next "yes" deal is right around the corner.

Do you know which aspect of investing (wholesaling, rehabbing, etc) you want to focus on right now?

Great Story @Gino Barbaro!

This that you wrote in another post "we had no niche, no strategy, and were chasing too many rabbits." is so profound!  My own business didn't take off until I realized I needed to stop chasing ALL the rabbits and just focus on one at a time.

Are you partners also part of Dave's program?  I met Dave before he was "big" and seemed like a standup guy who really knew his stuff.

oh I see. My thoughts (tho I have no experience in this): maybe get to know several realtors who work with first time homebuyers and present yourself as the person who can help them help their clients.  Would probably help if you have a portfolio showing renovations already.  How does something like a presentation showing old house and what you can turn it into sound?

Do you have construction/contracting background (or reliable access to someone who does)?

I have some really snazzy business cards I printed on Moo (love them!) but I also use Vistaprint sometimes (sign up for their mailing list and wait for the discounts).  I'm definitely going to look into the others listed in this thread.

If I know I'm going newbie networking event where only 1 or 2 people are seriously taking action in their business, I now print some at home on yellow card stock. I stumbled on this by accident - had ran out of the nice ones and had yellow printer paper around so I made one in the style of "we buy houses." I called it "JJ's out of cards business card" and people loved it so much (even though it was a flimsy piece of paper) that now I just print them that way on card stock. I still have my professional business cards for regular daily use but c'mon we all know that most of the people at a sell-a-thon reia aren't ever going to do anything with your card.

Well, if they won't accept a 130K offer, maybe you guys could just rent for a year and get your finances, savings, and health in order. 

Or how about a SFH instead of a duplex? You could try what I'm doing: I'm about to move in a few months and I'm currently in the process of submitting lowball offers on single family homes that need work but are still livable. When I get one that will sell at a discount, I will buy it, fix it up, then rent it out and buy another one. I only plan to be in that area 3-5 years, but will retire nearby so no need to buy my "nice house" until then.

If it's any consolation, you're not alone- one of my first rentals, one month after renting it out discovered the toilets were not connected to the sewer main. Terra cotta pipes had disintegrated years ago.  During rehab we hadn't used the toilets enough to notice.

Two answer your questions: yes, I think it's reasonable to have issues come up early - especially since you don't yet "know" the properties.  I've not heard of a tenant giving a falce police report number but I HAVE had tenants give false damage reports - especially when I was out of country for work.  This is why I ask for pictures immediately.  I try to buy properties where I profit from day 1. I have some properties that I used to profit on but don't now because the market shifted, and I have one that I bought at break-even foolishly thinking I was ok because "one day the value will go up"  will never make THAT mistake again

Don't let this discourage you!  Real estate is one of the best wealth building tool I've ever seen.

@David Goings, I echo what @Jeremy Pace said: without verifiable and reliable income you are going to be hard pressed to get anywhere with a bank.  I think you would have better luck connecting with local hard money lenders / private investors at your local real estate investment meetings.

Another option is to use your own cash for deals. This is my fave, but I understand not wanting to tie up all your liquid cash when you don't have a 9-5 right now

Either way, once you've been successful at this for ~2 years, you'll have tax returns showing your make a reliable income doing this, and that should help you when it comes time to get a loan. 

BTW, congrats on yoru first two deals!!