All Forum Posts by: John Wijtenburg

Not really. New sources are coming and going on a regular basis. CoStar is expanding like crazy via acquisition, which comes with more data but also more market concentration and pricing power.

Depending on where you are farming, the free public county and state databases are always good sources for data. GIS is becoming more common for aerial search, and paid public record aggregator services seem to be improving data quality.

These days, a VA overseas dedicated to data and outreach is probably the best investment you can make. Here are some tips:

- establish a solid plan with clear objectives and measurable success

- work in small, weekly project sprints that make data collection, clean up, and enrichment manageable and less daunting

- have a daily huddle (10-15 min meeting) to track progress and handle issues/questions

@Leslie L Meneus

You can approach this in many ways. It's difficult with COVID, but often the local real estate investment clubs are a great place to start. If that's difficult, find any place that you can meet and interact with real estate people.

The most important part of mentorship is to focus on adding value. Don't expect someone to invite you into their circle just to impart knowledge. Step forward with a deal that you've taken the time to underwrite and line up the finer details. Bring all the challenges and questions to the table in a clear, actionable list.

Most important... do what you say you'll do to build trust and keep the relationship alive. Each party has an important role to play. Nobody wants to waste their time.

@Carra Stokes Why are you looking for investors for other investors?

If that's the case, be careful on how you're compensated for that work. You could put yourself in a precarious situation with the SEC.

The REIA route is definitely one to check out, but consider other network-building strategies. A good digital marketing strategy can fill your database effectively, and frequently attending real estate-related events is capital raising 101.

I found that a broad relationship mindset is the most important tool for raising capital. That is, the more you focus specifically on capital transactions, the less success you see. You need to be open to connecting to the right partners from unexpected sources - centers of influence.

@Leche Hopkins There's some good advice above, particularly from @Doran Summers and @Lauren C.

I would echo that a major renovation may be a little too far out of your abilities for the first deal. Look for value-add deals where the scope of work is limited to cosmetic improvements, like paint, flooring, and maybe some cabinetry, rather than structural issues, like mold, roofing, and other weather proofing.

The lighter scope is more manageable for a beginner and usually doesn't result in major unexpected challenges.

@Scott Passman Thanks for sharing this. Super valuable.

I would add that the fear of a pending recession should not take anyone out of the game. This is the time to double down on relationships to be in pole position when prices reset.

Top three relationships to work on:

1. Major deal sources - brokers, owners, and influential third-parties
2. Capital sources - friends and family, centers of influence, and lenders
3. Execution team - operators, contractors, attorneys, accountants, etc.

Dig the well before you're thirsty.

@Erin Hogue congrats on deciding to get into hospitality. It's a tough, but rewarding, business.

The economics of this deal might be difficult, depending on the service level you are targeting. A 12-room hotel will operate more like a bed & breakfast, and you should be prepared to be the manager.

Assuming you have a good handle on the financial model, I would agree with @Justin Bauer. You need a skilled team - attorneys, architects, designers, and accountants - to effectively navigate the historical renovation. You'll also need an engineering study to determine the building basis if you plan to apply for historical tax credits.

This project is not for the faint of heart. You will learn a lot, but it will definitely be a challenge.

@Joseph Stewart congrats on the sale and deciding to get involved in hotels.

There's some great advice above. I'll confirm that 1) general underwriting guidelines for FF&E/Capex reserve is around 4% of Gross Operating Revenue and 2) a deep recession (like the last one) sees revenue impacted by +/-30%.

Regarding your financial abilities, it really depends on your strategy.

Hotel investing is a long-term sport. I wouldn't advise anyone to buy a hotel just to add to their portfolio. It's an operational- and capital-intensive business that you need to actively monitor. That said, it's exceptionally rewarding when you do it right.

You're right that the economics of third-party management really only start around 80-100 rooms.

The PIP expectation relies heavily on the age of the property and deferred maintenance. Your business plan (re: additional capital investment) depends on how long you intend to hold.

I always suggest that new hotel investors get started with an experienced operator in a co-GP or LP position. This allows you learn the business while putting up minimal capital.

Lack of cash should never be a reason to sit on the sidelines. Start building your network to source opportunities and capital immediately.

1. Connect with deal sources - brokers, owners, and influential third-parties - and build fruitful relationships
2. Create a system to efficiently evaluate every deal you come across
3. Find a mentors on BP or in your area that can give you advice along the way
4. Build routines and habits help you stay consistent with your prospecting
5. Get a good opportunity under contract - the money will come, even if you need to flip the contract

Good luck!

Good advice above.

For repayment priority, consider this nugget that helped my mindset.

• Start with the highest interest rate loan
• Multiply your interest rate by 10 (e.g. 6% becomes 60%)
• Allocate that percentage to paying down that loan. That is, 60% of excess cash to your debt and 40% to savings
• All excess cash should go to the loan if the interest rate is greater than 10%

This get's a little funky when consolidating debt in a 0% interest balance transfer. In that case, I would still allocate 100% to paying down the debt because it will reset eventually.

In the meantime, start building up your network. Lack of cash should never be a reason to sit on the side lines.

1. Connect with deal sources - brokers, owners, and influential third-parties - and build fruitful relationships
2. Create a system to efficiently evaluate every deal you come across
3. Find a mentors on BP or in your area that can give you advice along the way
4. Build routines and habits help you stay consistent with your prospecting
5. Get a good opportunity under contract - the money will come, even if you need to flip the contract

Great advice from @Cameron Tope! Too many people want to jump to chapter 20 before they even read page one. Focus on incremental progress toward a clear vision.

Sounds like you have the social inclination part covered, and you have lots of time being a student. So... for tactical advice, I would add that you should focus on building relationships.

1. Connect with deal sources - brokers, owners, and influential third-parties - and build fruitful relationships
2. Create a system to efficiently evaluate every deal you come across
3. Find a mentors on BP or in your area that can give you advice along the way
4. Build routines and habits help you stay consistent with your prospecting

Don't worry too much about your investing strategy, right now. You'll find a niche as you get to know more people in the business.

Relationships are the foundation of any sustainable real estate business. Start building your network today, and you'll be amazed at the opportunities you have by the time you graduate.