On Tuesday, in Part 1, I shared a story with you all about how I wanted a bike SOOOOOO badly when I was in first grade that I pretended to have one when making a picture for my art class. When I finally badgered my parents into one I was so excited to get on and ride it that I didn’t feel the need to first learn how. I ignored the good advice of my parents and gave it a go on my own; going down a giant hill no doubt. I obviously fell off and scratched myself and my bike all up.
Waiting for the connection to real estate are you? This same eagerness is what I often see in new investors. Wanting to just hop right into being an investor and forgetting the steps to build the foundation for the new business.
Tuesday we discussed the following:
Moving into Part two.
4. Find an REI Group. I actually make finding a good Real Estate Investor group a requirement for my students. Why in the world would I do that?
What you get out of an REI group is more than just a place to spend your Tuesday night without feeling like you should be at home building your empire.
YOU get comradery from like-minded individuals. We have all heard that you are only as good as the sum of the five people closest to you. Thankfully this is not proximity because right now I am surrounded by two lazy dogs and at least one has gas. This is referring to the people you spend time hanging around. I am not suggesting that you change your whole social circle to investors but it is inspiring to be around others who are making moves.
This group will also lift you up when you are having a slow season or two; when you are just hitting on nothing.
In this type of group you can learn what works, what works better, and what is just a plain waste of time….like posting on backpage unless you are selling more than houses…if you know what I mean.
You will also find professionals who are looking for people like you; that are accustom to the unique demands of the industry.
This rolls right into the nest topic…
5. Build your team. I have said this many times before, you are only as good an investor as the team you have backing you up. Your contractor(s), realtor, lender(s), and for goodness sakes your attorney.
Each member of your team need to be familiar with working with an investor. You are not the typical client.
Your contractor needs to understand that time is of the essence more than any other job they will do. Your money is expensive and your window for optimum listing dates is small.
Your realtor needs to understand that you will be writing a lot of offers and most are not going to get accepted, especially if you are writing blinds. They need to not be upset that your EMD is held with the attorney, not them. The big one is that sometimes you will not ratify a contract for one reason or another. Guess what? The bank doesn’t care (if it is an REO) because there are 100 other offers in line behind you. They need to know the speech about being sued for performance is a song and dance. Move on to the next one.
You need a lender that specializes in lending for flips and investment property. This is not going to be the bank on the corner.
Not all attorneys are made equal. Not even all real estate attorneys. You need an attorney who can handle creative, outside of the box, closings….and fast. This is REALLY important…they need to be able to defend your creatively financed contracts in court.
6. Private money packet. If you are planning on flipping you are probably planning on using hard money. The interest on hard money can be as hard as a shot of tequila…and as tough to swallow. You should be looking for private money. You do not need to have private money before you find a deal but you need to be ready to pitch it if the opportunity arises.
Create a Private Money Packet. This is a professional looking brochure, booklet, or packet in a nice folder that explains why being a private lender is a good idea. I am not going to get into that at the moment but you can read my previous article that you can find here.
Ultimately, you need to make sure that you have all of your pieces in place so that you are able to soar through down the road rather than falling on the first obstacle like me and my favorite blue bike.
Happy Investing My Real Estate Junkies!!!!
I was born an entrepreneur. I am pretty certain that I was peddling passies in the hospital when the nurses left the room.All of the other kids in the neighborhood were riding bikes and playing with dolls I was selling jewelry out of a catalogue and creating a back yard consignment shop. At 21 I became a real estate investor and fell in love. This was/is/ and always will be my passion. I have been madly in love with flipping, holding, and writing offers on real estate that seem crazy for 18 years. Ladies and gents I am willing to share the love of my life with you. Maybe its polyamory maybe its jut because I can’t shut up about it. Either way I will be sharing every mistake I ever made and the lesson that came from it. I love questions. Please ask away!!!