All Forum Posts by: Scott Krone

@David Medina  - The material they teach is accurate, and from people who are active investors.  I do NOT work for them, but am familiar with them.  I can vouch the teachers are active investors.  If you attend and learn nothing, then you have done well learning in advance.  Most who want to get into real estate, have no idea what or where to begin. Fortune Builders does have a solid system to teach people the process.  Is it expensive, only you can answer that for yourself.  Can you learn the material elsewhere - sure but it too has a cost.  

For us, we begin by defining roles before we address compensation.  The roles determine the amount of time (value), money contributed (value), and expertise (value).  Each is a vital component, and the three of you need to work through the roles first.  Otherwise it can lead to resentment (I do ALL the work.....).  What works for you may not work for some.  For the compensation, once we define the time value of the work, we also address the risk tolerance for the investment.  For instance, a property manager can be hired for 5% to 10% of Gross income.  It is easy to place a value at assessing that time.  It can be hired on the open market.  With respect to money invested, what is the proper risk associated with the investment.  If cap rates are accepted valuation 6% rate of return, then there is a basis for that conversation as a starting point.  Hope that helps

Prior to determining splits, it is important to determine roles, and responsibilities.  Compensation should be based upon those rather than relationships.  We have seen splits 50/50 if one party is doing all the work, and the other brings the cash.  We have also seen them 60/40 and 40/60.  It should be evaluated deal by deal basis based upon level of work, risk, investment (time and money).  So, my suggestion is to determine how the company is going to be run, who is going to do what, and what is the value of those tasks.

Study and invest in education.  Be prepared when you feel the timing is right.

@Benny Gelbendorf It is common for foreclosure agents to not return phone calls. I have seen it for residential as well as commercial. With a $29k property, their commission may be $580 - how many calls would you return for $580. They want an offer, clean offer. Building a team via an inquire over a $29k property is perhaps not the best strategy. I would suggest reaching out to the realtors who sell the completed rehab properties, and rely upon them to reach the REO agents.

I would suggest with education.  If you use $190k fully deployed all year and 100% success rate perhaps you yield 10% prior to expenses.  Is that enough revenue for your new company.  If not then you need to see how you can create different opportunities with that cash.  Grand Coast Capital (full disclosure I do not work for them) is based out of South Shore.  They are a lender who receives investments for two real estate funds and then deploys them into either single family or commercial.  My understanding is they return to their investors around 10%.  They are very good guys that run the firm and truly believe in education and knowledge as the key to real estate.  I suggest stopping by and discussing with them their strategy as well as what their clients do with the loans.  You can learn how others got into real estate as well as what established investors do with their cash.  Best part it is right in your back yard.

A few thoughts.  First be patient and do your due diligence.  Second, it appears online technology is your back ground so build off what you know.  Look for opportunities that utilize the technology you know.  Lastly, pursue the area of real estate that resonates with you.

I have been in real estate for 25 years.  We joined Fortune Builders because they promote, teach, and facilitate the correct systems.  It has been been beneficial for everyone in our company to receive their training.  As in life, there is a cost not only financial, but you get what you put into it.  Is it for everyone, I can not say that.  Is it legit - Absolutely.

@Ronak Shah  We convert warehouse and/or office into self storage.  Apartments into self storage would not work well.

@Tony L.  We currently own and are in the process of converting three more warehouses into self storage.  www.codamg.com  more than happy to answer your questions.  There are many solid reasons for self storage.  We view them as apartments without toilets.  @Mark Yuschak Valuation of self storage is similar to other commercial real estate. NOI and Cap rates. However, self storage is very predictable based upon demographics and rental rates. We study the demographics well before we ever make an offer. The proformas can be modeled out based upon historic performance to determine the projected NOI and cap rates. There are feasibility companies that specialize in self storage. Brokers can also provide the most current cap rates. We have seen assets trade between 4.5% - 6.5% for Class A self storage.