All Forum Posts by: Nicholas Miller

local Real estate investment groups is the best first step to finding and networking with other investors.

Finding other investors is a tiny first step...  The most IMPORTANT thing you must do is build a relationship with other investors.  If you do this correctly the day will come when you can find a deal, pick up the phone and fund it, sell it or flip it because of your relationship.

The best thing you can do to build a fast and profitable relationship with an investor is to find a few deals...  Dont worry about how much money you will make just find the deal and hand it off to an investor you want to work with in the future.  Even if they don't buy the deal this is a good way to quickly build a relationship and to show them the level at which you can work.

It depends on the deal you are going after and your plans with the deal... If you are going after deals on the market (MLS), reo's (fannie, freddy, HUD, USDA) you will need to find an agent.  If you find an deal and you do not have a working relationship with an agent you could use the listing agent to submit your offers...  Income for an agent is based on commission so if there is no deal there is no income (sometimes they charge an upfront fee...  if they do so find a different agent who works just off commission).  Ethically an agent should not "push" the offer they are submitting to the seller however people are people and if an agent will double his commission by representing both the seller and the buyer....  they sometimes brake this ethical rule (Its not right but it is how some agents (NOT ME) work).  So, submitting an offer through the listing agent can be an advantage.

If you are going after FSBO's (For Sale By Owner, investor wanting to sell inventory...) you do not need a realtor and an offer can be as simple as saying... Well, here is how I made an offer six weeks ago

 "I will give you $1,000 to walk away from the home, this verbal offer does not expire so if you want to think about it or see if you can find a better offer thats fine just understand if the home gets a condemned sticker or a demolition order this offer is off the table.  If you agree to this cash offer meet me on December 1st at my office, bring your drivers license and the keys to the home and I will have all the documentation waiting for you"

This was an offer made over the phone while I was working in the basement of an apartment building I own...  They took it!  If my goal was to sell the contract prior to closing this would not work and solid documentation would be necessary however in that event a verbal did the trick...  If they agreed but did not show up at closing I was not going to take them to court or chase them for damages.

1. How do we find investors, and how do we prepare ourselves with the skills and tools needed to secure funding?

2. What do investors look for when partnering?.

Here is my two step guide to wholesaling 

1.  get a contract for cheap

2.  sell the contract for more than you bought it for

Deals come because of work ethic not because of a license.  If you are not finding success do not look for an excuse look for the right opportunity and keep looking till you find it.

If you only have the cash to do one deal and you have a family member who needs a primary residence I would recommend looking into owner occupant opportunities. I would recommend starting with a government foreclosure www.hudhomestore.com is where you will find "HUD's" www.homepath.com is where you will find Fanny Mae properties

Owner Occupant Priority aka "exclusive" (hud) aka "first look" (homepath) if you are willing to live in the home for at least one year you get a 15 day head-start ahead of investors. So if the deal of a lifetime pop's up and there is $20,000 in equity all you need to do is live there for a year, refi the home to get the equity or sell after your 1 year is up.... I bought my primary residence 18 months ago as an "exclusive" buyer... Previous sale price $108,000 we bought it for $25,000 with about $1,000 in repairs to make it move in ready.  

Liquidity is far easier with a single family home than a multi unit building so if you find out you are not into being a landlord you would be much less likely to lose your shirt.

It depends on the deal...

Wholesale/Realtor: I like any area in Allen County, Indiana because I have buyers for any hot deals I can find regardless of location, condition or price.

Retail Flip: If I am going to risk my capital for an investment I always have 3 exit strategies in place before I pull the trigger. 

1.  I am willing to live in the 46725, 46825 and 46835 because they are close to my friends, family and amenities that I like so if I am wrong about the flip I can move the family in as a primary residence,  

2.  The three mentioned zips have a lot of homeowners compared to renters which indicates owner occupants are buying in these areas.

3.  Depending on the exact area there is a lot of development so a second exit strategy can be a long term hold with high rent and potential commercial resale (they want the land not the home and if it is a commercial developer that can add profits of $100,000 - $200,000 regardless of the condition of the home)

Long term-hold: Anything in the shadow of a government investment or commercial investment...  If the numbers work AND I can generate positive cash flow every month with an exit strategy of renting forever, selling to the government or flipping to an investor I will buy anywhere.

Contracts: if the numbers work to create positive cash flow, if it is within 10 driving minutes of my home or in an area where I have a good property manager I will buy on contract.

Plan your investments on your financial goals not on location

 Anyone with internet access can get a google voice account.  Its simply a voicemail service from google.  All you need to do is search google for "google voice" and set up an account.  To do this you will need a cell phone...  and thats about it.  After a few simple steps it will replace your phones voicemail.

With google voice you can pick a new phone number, keep your existing phone number or buy multiple phone numbers...  My cell phone will ring anytime someone calls 

(260)693-7368 (thats (260)OWE-RENT)

(260)632-2002

or my real cell number

(260)444-1842

I think I had to pay a one time fee of $40 for the 632-2002 number and it is worth it as I can gage the effectiveness of ads.  If I have an ad running the 444 number and a second ad with slightly different wording going to the 693 number and a third to the 632 number I can measure the response rate for wording used based on the phone number that gets the most calls.

Also, with google voice you can have different voicemails for different groups.  Lets say you are a wholesaler, realtor, landlord and a family man/woman.  You can set up different voicemails for each group...  So if I can have a voicemail for my wife that says "hey babe, sorry I cannot take your call but I still love you" and I have have a voicemail for clients that says basically the same thing minus the word "love" and for tenants I can have personalized voicemails with rent instructions, emergency maintenance instructions.

(screent shot of "settings" - "groups & circles" family gets the friends and family message, spam goes straight to voicemail, tenants get the 693RENT message and everyone else gets my Nick Miller the Realtor message)

There are tons of features with google voice that might help you in your real estate investing but these are my favorites.

Went to Menards at 9pm last night with the goal of getting a good deal on flooring.,  Spent the night in the truck and stood in line from 4am when they opened the doors at 6 am I was one of the first to get in... Only to find that it was not the store with the discounted flooring I wanted (home depot had the flooring).... I bought cement and 2x4's and a few gifts for the girls... none of which were door buster deals.

Its Christmas time for investors!  Here is a graph showing monthly sales from 2012-2014 do you see a consistent dip in sales activity between late November and early March?

Try this one showing monthly sales volume Jan 2008-November 2014

and one more from Jan 1998

Lower market activity means less buyer competition.  Less competition means more favorable buyer leverage.  

If you want to buy when the market is the most favorable for an investor buy yourself an investment house for Christmas.