All Forum Posts by: Micah Cook

I am currently investing privately, but my ultimate goal is to form an investment firm or business if you will. I have heard the best way for someone in real estate is to form an LLC versus incorporating. What are the tax benefits in forming an LLC versus just private investing or incorporating. Or what business type would best facilitate growth to eventually manage a large portfolio and provide comfort for investors and ourselves?

I am definitely not the most experienced person when it comes to investing, but I thought I'd tell you about how I was able to get into investing while still in college:

I've known for a while that I wanted to get into real estate investing. I was very lucky to have a parent involved in real estate that was able to show me how lucrative it can be and supported my goal to be an investor. I bought and sold electronics on eBay all through high school and my first two years of college. I was able to put aside enough cash to purchase a foreclosure with an investor/realtor this year as a junior in college.

I considered trying to get a loan to buy a property, but due to the fact I was self employed, I had no work history, so my only option was to save cash. I'm glad it worked out this way because I get to invest under someone who has been doing this for a living and I also did not have to have cash to purchase the entire property.

It might be good for you to find someone who you can work under as it is quite a lot of work and a lot to decide on when purchasing a property. It would allow you to invest while also have the safety net of someone who is experienced.

I hope this helps!

I think that that is what this business is all about. Knowing a good opportunity when you see it. For me, I like to look at some comparable sales in the area to get an idea of what the house in question could sell for if in similar condition. That will allow you to see how much of a margin you have between the purchase price and what it could sell for. 

Then you have to figure what the cost of renovations will be. Now you can use the comparables to see what people will pay for a house in a given condition. That should allow you to determine what needs to be done and you can then get estimates for those items. I believe that kitchens and bathrooms will sell a home and are also the most expensive things to redo in a home, so you will most likely find that the homes with higher sale prices and low Days on Market will have those items updated, or at least partially updated.

You can always make an offer contingent on having a home inspection. It will weaken your offer, but will save you if they find major problems that a newcomer might not notice.

Hopefully this helps!

Hello BP,

I located a great investment opportunity on a foreclosure and I will be only be able to provide about 15% of the cash needed for the full-cash purchase. I pitched in to an investor and got him on board and he will be providing the remaining 85% of the cash for the purchase. 

I was wondering what would be the most fair way to divide the profits between us. He suggested a "percent in, percent out" idea where the percent of the investment you provide, is the percent that you get of the profit. I think that this is fair IF each person does the same amount of work and shares the same amount of responsibility. However, I located the deal and will be doing most of the overseeing and organizing while he will just be providing the majority of the funds.

I was wondering how you would go about dividing it, and also how much credit you give to finding the deal and being the one to oversee and manage the flip. 

Thanks for the help!

I am definitely not the most experienced person when it comes to investing, but I thought I'd tell you about how I was able to get into investing while still in college:

I've known for a while that I wanted to get into real estate investing. I was very lucky to have a parent involved in real estate that was able to show me how lucrative it can be and supported my goal to be an investor. I bought and sold electronics on eBay all through high school and my first two years of college. I was able to put aside enough cash to purchase a foreclosure with an investor/realtor as a junior in college. 

I considered trying to get a loan to buy a property, but due to the fact I was self employed, I had no work history, so my only option was to save cash. I'm glad it worked out this way because I get to invest under someone who has been doing this for a living and I also did not have to have cash to purchase the entire property.

It might be good for you to find someone who you can work under as it is quite a lot of work and a lot to decide on when purchasing a property. It would allow you to invest while also have the safety net of someone who is experienced.

I hope this helps!

@Kyle Soderman I completely agree. I went to Indiana University for my first semester and it really made me think about my options and what I wanted to do in life. After one semester I decided that REI was my passion and it would be impossible to start if I was away at college. So I decided to transfer to a local school so that college wasn't taking up 100% of my time. I liked college, I figured it would be a better use of my time to get the same degree while also being able to start my REI career. Not to mention it is about half the cost of IU.

@Kyle Soderman I completely agree. I went to Indiana University for my first semester and it really made me think about my options and what I wanted to do in life. After one semester I decided that REI was my passion and it would be impossible to start if I was away at college. So I decided to transfer to a local school so that college wasn't taking up 100% of my time. I liked college, I figured it would be a better use of my time to get the same degree while also being able to start my REI career. Not to mention it is about half the cost of IU.

@Kyle Soderman I go to a college not too far from my home but I thinking more towards a buy and hold for my first one. Thanks for your response!

@Kyle Soderman I go to a college not too far from my home but I thinking more towards a buy and hold for my first one. Thanks for your response!

@Ben Leybovich I guess I made my decision based upon what I've seen. My mom will often tell me about foreclosures selling for less than 10k and then being bought and sold for 60k or more. I want to be a part of that. I don't want to be in the group of people that goes to college for 4 years and then starts filling out job applications. I want to be able to get started now. I hear people say so often that they wish they would've started earlier. I know RE is good because you aren't dealing with a depreciating asset like a car. The money you spend you can often get back out years later. I think that having the passion for something already gives you a huge advantage over people that watched an REI infomercial and want to try it.