All Forum Posts by: Sam Valme

@Ron Olivera broke down. Thats the behind the scenes on what I ment by my second paragraph. Good luck my friend!

Hey @Nick Ovington, check out this resource on BP. Pretty concise example to get you started! 

Craig Koehne: Sample Business Plan

https://www.biggerpockets.com/files/user/CraigKoehne/file/business-plan---rev-0

I'm gonna have to agree with @Roland Thomas on this one. If you had a million dollars to invest. I'm sure if you searched hard enough. You could just hand over that money to an entity that would simply have a written agreement to give you back 10k monthly for the rest of your life. While they made your money multiply in ways you've never imagined. 

So the question is, if you have that amount of money and presumably no REI experience. Why real estate? Whats your direction? Are you willing to put up with all of the headaches that go into learning the business and operating? If you really want to ride this train the first thing to do would be to educate yourself. Read the books, listen to the podcasts, attend the webinars, talk to seasoned vets.

Build a business strategy and plan that can grow exponentially and work for you autonomously at the end of the day. A million dollars thrown into real estate without a proper plan holds the same level of risk as throwing that money at a slot machine in vegas. Learn to mitigate the risks and find a path that your comfortable with. 

Best of luck!

Hello @Ron Olivera, to answer your question concisely. What I would do with 50k and assuming I wanted to flip. I would try and tap into that 50k only as a last resort. Build up a network of private money or hard money lenders. Build some criteria that works within those markets. Then get your criteria into the ears of as many agents as possible. Try driving for dollars or direct mail if you can as well. 

Use other peoples money to get yourself into the flip. If possible, use their money for the rehab as well. Keep your money in the bank to bail yourself out if things don't go so well on the first few attempts. Rinse and repeat. Build a strategy that is scalable and franchise-able. Examine other markets after a period of time to move to if necessary. In case one of your markets deviates from your current criteria. 

Flip enough houses that you can hire someone to "assist" with your projects. Teach them the system. Build an incentivized program to help them eventually work on their own. Hire a second person to be the first persons assistant. Have them learn the process. Move to other markets that meet your criteria if necessary. Rinse and repeat. 

Look back 10 years from now on the empire you've built. Create a company that is autonomous and doesn't require your attention full time. Travel that world. Enjoy your kids. Have 6 day weekends. Look into your bank account and see that 50k become 5,000k. Hopefully without a cent leaving the entire time. 

Thats what I would do with 50k. 

I voted!... I feel like I should get a sticker or something :P

Hello @Mike Crossman , as someone who has worked with family in REI. I feel your pain. My advice would be to treat this like a business. There are market averages for rent. The sister needs to be within those margins. Now I'm not saying ruin christmas by kicking her out. But the expectation needs to be reset with facts. Not just because you're the owner now and you say so.

However, as family I would give her the courtesy of explaining why the rent has gone up. In more detail then I might with a typical tenant whom I had inherited. Take her on Zillow or some over website and show comp rents in the area. I would also recommend doing this before you buy. That way you don't go one day in the red. 

Overall working with family doesn't have to be difficult. As long as there are crystal clear expectations and respect. In my situation, I was the renter. My parents the owners. I would mention things that need to get fixed for years. Nothing would happen. So, we worked out a deal. I would buy the house and in addition to getting a competitive price. I would get back, from their equity, money for all the repairs I wanted to do to the home. 

Key business principle I live by: Everybody Has To Win. 

Hope this helps!

Hey @Nick Ovington, first off congrats on making the decision to get into REI! If you have the right plan and mindset, financially freedom can be in the distant/near future. Depending on the aforementioned "plan" and "mindset" :) .

The Canadian forums are here: https://www.biggerpockets.com/forums/90-canadian-r...

To get started, your going to need to make sure you have a couple of things. 

• Your personal finances in good shape.
• A Business Plan on how your going to enter this industry.
• The right education to accomplish the goals in your business plan. 

Luckily, the resources on BP can teach you most of everything you need to know. I addition to the forums. I would start attending some of the webinars, listening to the podcasts, and reading/listening to some books on real estate

Podcasts: https://www.biggerpockets.com/podcast

Webinars: https://www.biggerpockets.com/webinar

Books: https://www.biggerpockets.com/books

They're all excellent resources to get started. Also, reach out to other folks in your area! See how they are getting started and operating. https://www.biggerpockets.com/meet = a great place to find folks in your area. 

Best of luck!

Hey @VICTOR TEYE, my big take away from the situation, once you've moved one, would be "How can my system avoid this situation again". @Upen Patel has run through all of the next logical steps that make sense to me. From there it really depends on how risk adverse you are as an investor. 

I would advise building your network to include more private lenders. If you have a scalable growth strategy there should be contingencies for your contingencies built into place. You coming up with the down payment out of pocket may be practical to begin. But long term this may shift to a last resort if your two other hypothetical primary private money sources of money fall through. 

Hey @Account Closed did an awesome job breaking down the basic concept of "markets". The term can be ambiguous but thats due to the art of this industry. There is no one way to define every market. The market becomes defined by the viewer when they see the similarities of an area. More importantly for us as investors, how these similarities can effect home values. Be it positivity or negatively. 

As an example. If you have a city that has a large corporation moving into the center. One might say that the (city name here) market is looking good. Because that corporation might bring more jobs etc. But a corporation moving into a city doesn't really impact the US Housing Market as a whole. 

However, if there is some major downfall in the US Housing Market because of a new government regulation on mortgages. The talking heads on the TV might say "The US Housing Market is crashing and the world will end in T-minus 10..9..8...". Yet, a city small city market with a booming tech hub doesn't experience the blow as bad. Because their micro-economy is strong enough to withstand those kinds of shifts. 

So the next question would be. "Okay, markets are relative. So how do I know what I'm getting myself into?". I would start with your personal criteria. What is it that you are looking to do? Buy and hold? Flip? What is your financing method and budget? Figure out what you want and start looking. Talk to RE pros in the area. Give them what you're looking for. Part of their job is to help you carve out these markets that fit you. 

Hope this helps!

Hey @Jerryll NoordenI'm trying to follow your story here. Not sure if you were speaking in past tense when you said your credit score was ruined but 700 isn't too bad. So thats a good thing! A couple of things to keep in mind. Based off of your schedule it sounds like there isn't a whole lot of time with the hell job. Who is going to be managing these houses your looking to build? If its yourself you'll have to keep in mind that this can potentially be even more time out of your week keeping even one in pristine condition. 

As far as cash flow is concerned. For these new houses, it sounds like you're looking to have them rented out room by room. Be very sure to check the zoning ordinance for where you are building. Some areas only allow you to have 3 non-related adults living together. Not that it absolutely will come up. But one call to the county from an upset neighbor because of all the cars parked in front of their house is all it takes. 

The next thing would be to consider ALL of your expenses. Even if everything is brand new, you'll want to account for a maintenance and capital expenditure (big items-water heater, roof) budget. New houses can have quirks and those warranties always seem to have one thing thats not covered. This WILL effect your cash flow and can be the difference between victory and defeat, especially early in the renting game. 

The last bit of advice I'd give would be. Be realistic. If your goal is to quit the hell job, then you're going to need another source of income. Wholesaling could be it, but that can take a long time to get established. You may still be in this job for the next few years. But you can consider that W-2 one of your greatest assets when it does come time to talk about loans. 

As others and yourself have said. Get focused, figure out a solid plan, and DO THE MATH. Check out some of the analysis tools on the site here: https://www.biggerpockets.com/calculators . Run the numbers on some of those houses you are looking to build and see if they really make sense. 

Good luck!