All Forum Posts by: Tommy Keay

@Shiloh Lundahl yes if people read this and find a person like Shiloh who take on just a handful of people and are invested in each person 100%, I think that could be a great idea! I guess to sum up what I am saying is when I google real estate training in my area or real estate mentorship in my area these are all conferences and classroom-style learning atmospheres. You pay your dues, you attend and hopefully you use the stuff they said and the rest is history. If you can find a one on one mentor who can physically guide you through the process, that is awesome!

Anyone in these areas involved in working with investors? Lenders, PM's, Contractors, Agents all recommended! Would love to connect with rockstars in the area that have some input about what they see in the relative markets! 

Looking through IKEA's website and it seems they have some competitive prices and the products could be better quality. Anybody have experience rehabbing with just IKEA products? 

I have always been drawn to 30 years because it makes more sense. 1.) People are paying your mortgage down anyway 2.) Higher cash flow 

Also depends on your goals. Is your goal to maximize cash flow to retire or to build the most equity you can in 15 years? 

@Shiloh Lundahl well there are a few things to mention here. Do you do coaching as a business? Because this sounds like a unique situation where you helped someone that you had a great relationship with (greater than just an average stranger) and there was a lot more trust and accountability involved. I am sure there are numerous examples out there where people went to a $10,000 conference and either did nothing with the information or made the same mistakes they would have made if they just jumped right into it. It also has a lot to do with the coaching you are actually getting. If you think of all of the coaching programs out there, do you think they all bring as much value as the price they charge? In some cases absolutely. In some cases absolutely not. So it definitely depends on the program and the price. It also depends on the intention of the people paying for the coaching. A lot of people pay for coaching because they just don't know how to do everything and they want to feel more secure by paying for coaching. To me, this is the wrong intention and not worth it. I would imagine there are people in my shoes (who have read and learned for 5 months) and still just don't truly grasp all of the moving parts in real estate (just like I don't) so they pay for coaching. That is the wrong intention in my opinion.

So 1) I don't think coaching and mentorship is as personable and accountable for the average new investor and 2) New investors have the wrong intention by wanting to feel like they need to know everything before they buy their first property which they will never happen

@Matthew Porcaro what was your reason for getting the 203K as opposed to just the FHA and fixing it over time you lived there? So you did a refi to a 20% down conventional loan? When you say you got such good returns, what are you referring to? Was it a duplex with other tenants or you did a cash out refi somehow? Thanks for your comment btw!

 Really good input Joseph! Certainly I don't understand how people spend thousands of dollars for education...So much better use for that money (like actually getting into it) I'm sure a $1,000 mistake is more valuable than a $1,000 coaching program! I bet one could arge a $3,000 mistake is more valuable than a $1,000 coaching program. One point you made that I didn't even consider is...making more income not only allows you to save faster and invest sooner, but increases your annual income so you can qualify for a larger/better loan. Great to get some encouragement to dive right in maybe a little sooner than I was anticipating. 

@Joseph Cacciapaglia Appreciate the comment! I think most people that start out, don't have the capital to go through your steps so quickly. I could be wrong on that take, but that is true in my situation and true with the only two other people I know personally interested in RE. It is important to be productive in educating yourself while you save. If people get distracted along the way during the learning process, it was probably not meant for them to begin with!  I agree action is so much more valuable than preparation. Over the last 5 months where I grew initial interest in RE investing, I have learned so much. I guess this advice is for people that can't afford a down payment in the next 2-3 months. For me my #1 goal is to get rid of student debt then save to put down my first down payment. I don't agree that getting a second job is more valuable than putting time into learning but I do agree that experience is more valuable than learning for too long. Well in all honesty both could be true. I could get a second job (which I have been thinking about lately) and still find time to learn real estate. The bottom line is every situation is different just like everyone says. For me, I have 6-8 months until I'll get rid of debt, save for properties in my market and make my first offer. I want to use that time wisely connecting with people, reading more books, and getting experience (like my shadowing example above). Now that you know my situation a little more, what would you recommend I do differently? 

I am writing this as a new investor, to draw out my steps for action. Some I have already completed/are completing and others are what the near future looks like. Comments, tips and advice are welcome!

1. Start analyzing deals.

This step involves a lot of moving parts. For one, you have to understand all of the terms. Familiarize yourself with what to specifically look for (what makes a good deal) and more importantly, understand WHY it is a good deal. Understanding the WHY behind things is what makes everything tough at first but creates a solid foundation for you moving forward. This involves a lot of upfront education and patience. For Example...in my market rent prices are almost always below the 1% rule of thumb. When I run the numbers on condos, I realize they are almost impossible to produce positive cash flow for long-term rentals. HOA fees that all condos have is what puts it in the red. I now know WHY I am looking for single-family house opposed to condos. This is an easy example but there are a million other why's you need to answer when analyzing deals.

2. Connect with people 

Once you know what you are looking for and know why you are looking for it, reach out and make connections. Go on your market's REIA website and call every member you can. Go to meetups. Get yourself out there. Everyone hears this, but I can say from example, until you pick up that phone and actually make 20 calls, you're going to be stuck running your same own thoughts over and over again! The power of one conversation (especially with someone who has experience) can produce so much value to you.

3. Connect with more people

Step #2 is more for mentorship, advice and just to have a connection with other investors in the industry. This step is to reach out and connect with people who you want to possibly do business with. Lenders, agents, Pm's, contractors, attorneys, etc. Having genuine conversations with these people to share your goals, and ask if this would be of any value to them as well, is an important step. Here is where you will actually learn about mortgages and what you will qualify for (pre-approval). You will learn how much a PM will charge you and exactly what they will do. You will learn how different contractors communicate and do business. This is another stepping stone for more knowledge! 

4. Putting in offers

For steps 1-3 hopefully you are saving money and learning a lot. Once you successfully understand what you want, how to analyze it, connect with people who have experience, and connect with people you want to possibly do business with, then you throw out your offers. From here you have all of the pieces in line and it is time to dive in. There is only so much you can do before you have to start taking action. 

Right now I am on step 3 so I am not exactly sure on what is to come next! When an offer gets accepted, its going to be real hands-on experience an knowledge from then on out. 

So far I have: 

1. Realized I want to buy a property with an FHA loan to renovate while I live there (gain instant equity to pull out later)

2. Connected with a good real estate agent. 

3. Connected with a new investor in the process of buying his first deal. Luckily I am going to shadow his experience while I save for my first deal.

Next steps are: 

1. Connecting with lenders, contractors, attorneys and PMs.

2. Throwing out offers. 

@Whitney Hutten @Sarah Brown thank you for your inputs!