All Forum Posts by: Tyren Robinson

100% Agree with @Mike Klarman starting small!  It is a catch 22 about building a team - you can't really do it for real without having a property.  Your local Realtors SHOULD be a good source of partners but there are great, not so great and everything in between.  They know tons of lenders but not all work with investors .  I have used Catalyst Funding - they are big in Texas and I had a great experience with them. They are investors that lend to investors.  The contractors - it will depend what you need when you need it and you will want to vet them 1 by 1 as needed. Recommendations from those in your local area are always good - you could meet some through local meetups as well.  

Before you try to build your team, I would recommend:

1.Define your goal - is it long terms passive or do you have more time to say, flip? 

2. Define your risk tolerance & budget - if you lost it all, would it break you financially. 

3. Define your buy box - recommend a small property, no pool, not too many issues, not in a bad flood zone (in Houston that is defined as AE). Something that will be easy to exit - whether that's selling or renting or whatever you plan to do.  

4. Have more than 1 exit strategy- IE: if you buy a house intending to flip and the market goes bad, have something that would be suitable as a rental as well. 

5.Know the area in and out that you intend to buy in - tax rates, HOA's, flood zones (if any). Be intimately familiar with it or find someone that is.

6.Buy umbrella insurance to CYA.

7.If you do not hire a Realtor and are not familiar with contracts, hire a lawyer to look over.

8.Make sure your credit score is good and you have liquid assets for more than you think you need.

9.Talk to an investor friendly lender to get familiar with the types of products.  We used Catalyst for a Hard Money Bridge loan right into a Conventional.  It was seemless.  

Once you have done all of that, then start running #s on houses so you know what a good deal looks like and hit the streets door knocking and making calls!

Good luck!

I deal with lots of new investors.  I always recommend that they start small.  In these real estate deals you are dealing with 10s of thousands of dollars and when things go wrong on a thin budget is when you see dumpster fires and hear the cautionary tales.

Most new investors concentrate solely on the down payment when in reality there's lots of costs: Closing costs, Holding Costs, Utilities Cost, you'll have to lay out money to the contractor for them to start the project, and there's taxes and insurance there's transfer tax title costs.

More capital than you think is needed.  I have opened up markets in the midwest where RE is affordable and beginners can get in projects that make sense for lenders.  That's important.  The cheapest life cycle of project I see can cost 25k.  That's if you purchase under 100k and get 85% leverage.  If you start buying at that 200k level then you are talking the life cycle costing 45k+.

I looked into the major markets in Texas: Houston, SA, Dallas/Ft Worth

Here is the issue there, as I have talked to many agents and contractors in those markets. The houses you find on the MLS do not work in the formula for flipping. Prices are too high. Margins too thin. All the off market stuff is held ransom by the local wholesalers who have a major footprint in the local markets. Their wholesale fees are high because people pay. You have cash buyers who do not care if the purchase price is 200k or 230k but if you are using financing and trying to stick to a formula for what defines a profitable project that 30k means everything. So you have investors with half a brain and deep pockets pricing out savvy investors.

I looked into those markets for my group but unless you yourself can grind out your own wholesale deals meaning you run the skip tracing, you develop a list, and you cold call in hopes of getting a house under contract.  Then it can work.  You do some projects and wholesale some, but like I said very, very competitive wholesale market.  Chances are the people you are calling have been called already by other wholesalers.

From Pitt PA, west through Ohio, all the way to Indianapolis is a great investment zone for beginners or anyone looking to scale really.  Affordable purchase prices, good spreads, good 2- 4 unit inventory, nice appreciation, active sales markets.

@Tyren Robinson thank you for your service and welcome to Bigger Pockets. For lead gen software I use Propstream. As for contractors, it would be ideal to physically see previous completed work and current projects. Hard money lenders will base terms on the relationship and previous completed projects, so you'll want to interview many and compare. There are plenty of wholesalers and agents out there as well, search the for individuals who are actually investors and have first hand experience in what they are selling. Good luck and enjoy the process!