I’d like to acquire my capital from Private Investors. The general idea I have is from a podcast I heard on REI.com Hire a list broker to get addresses for people who had CDs, IRAs. Then makeup postcards and send them out. Have the calls go to a live answering service or voice-mail. Then call everyone around 6 p.m., dinnertime, then ask if they are coming and if they are bringing anyone. After they see the presentation they eat lunch and everyone ends up talking to each other on the common ground being you and sell each other for you.
Three steps to everything get educated, get funding, get deals. Tell people you are on step 2 Funding so you can go out and do deals. Tell lenders they are “getting in on the ground floor”.
The presentation will outline the type of investments they will be dealing in and some of the items listed below.
- 401k quit/retire/laid-off they can move the 401k to a self directed IRA!!! Money goes to your closing table. Money has to go back to the custodian of self directed IRA.
- 10% for monthly payments or 12% pay when I get paid.
- Where else can they get 10-12% secured by a mortgage?
- Their job is to write a check and sit back and make money.
At last slide tell them turn to last page of folder that has an interest form so ask them to fill it out then go to lunch. Are they interested? Do they have questions? Do they know other people that might be interested? How much would they like to loan?
Talk first, eat second. Go from talking area to round table eating area so everyone has fun and talks to everyone.
Sounds like a phenomenal idea and I’d really like to use it I just need to make an excellent and professional presentation and figure out how to come up with a bunch of money to pay for the luncheons. I figured I’d try bird dogging/wholesaling at first because its low risk, I’d gain experience and make some startup cash to pay for these luncheons and other basic expenses.
Rehab Costs and Labor:
I’m going to be spending some time at the local Lowe’s to come up with a spreadsheet for all the possible supplies that I’d need for rehabs and just basic updating.
As far as the actual rehab process goes I’d be using ideas I heard from another podcast. Basically go to whatever specialty store that I need work from like paint/lumber/plumbing/etc. and ask the workers if they can recommend contractors for whatever job I need. I get there top 3 contractors call them up and say so and so at whatever place recommended them and try to get them to come and give me quotes for jobs. I then take the lowest quote for what I perceive to be the highest quality and then contact 3 other contractors and tell them I heard this quote was high and see if they can give me a better deal. All in all this is supposed to knock down general contractor prices from 20-50% if not more.
The other main idea from the podcast was to not use general contractors and just go to neighborhoods that are being built and talk to team leaders, foreman or whoever is in charge of what I need and see if they do side jobs. If they say no then I give them my info and ask them to give it to anyone that they know that might do side jobs. I guess a lot of guys will say no because they don’t want to have to share a job with a bajillion other guys so they will call later and say they can help me out with dry walling, plumbing or whatever I needed.
The final idea on the podcast was to setup contractor cash accounts at different locations. Apparently you won’t get too much if any discount at Lowe’s or HD just because they are already low but at other places it can save you a bunch of money. Also you can ask the workers where they get their materials from and call those places and say it is for so and so but you’re going to pay cash/credit card for them right now so they don’t have to mess with it. This way you get their uber discount. Any who you get the general idea.
Mission/Charter of LLC:
This part I need some help with and I’ll probably have to get it ironed out with an attorney at some point in time but I’d like to see what you guys think.
· I need to be given all powers to conduct business and cover my living expenses as business expenses.
· I need to be disclosed as the only owner/creator/founder or whatever the appropriate legal term is for said LLC.
These are really the only main points I can think of besides my general objectives at the top under Focus of Business.
I’d really appreciate any comments and or advice that you can give me cause I’m really trying to get my sh*t together. Oh and I tried to organize everything but I’m sure there is a part or two that isn’t exactly in order so I apologize. Also I’m sorry for being really long winded.
well first of all - there’s no need to be “sorry” about the orginization.
second - this is alot.
third - what is your business background?
fourth - who’s going to manage all the roll overs and IRA’s and 401k’s etc.
fifth - have you consulted anyone familiar with SEC rules?
sixth - this is a plan that will take you sometime.
you might consider condencing your plans into smaller short range goals and objectives. for instance - you say you need money to pay for these luncheons…well - the planning for running a SUCCESSFUL birddog or wholesale business is QUITE EXTENSIVE.
just learn the basics of real estate and attend your local rei club. as you meet people, always check everything they say and make sure it’s on the up and up. if it sounds funky - it usually is - avoid that and move on.
this plan seems okay - it just seems bigger than where you’re at right now. know this - no one is going to give you money without either
A - you having alot of experience
B - you know them pretty well
C - you have a reputation in the field
D - you are apart of team that has A B and C
start with A, while you’re doing A, do B…as you invest you’ll probably build a reputation (through contacts) C and then you can move to the next level…by the time you get there - you may realize that this current business plan isn’t for you.
it’s hard to “plan” something like this without having any real time experience in it.
good luck. keep in touch…
What you really have here is a goal sheet, not a business plan. A business plan should outline a plan for getting from where you are now to where you want to be. It is clear from your post that you only have the most superficial level of understanding of the issues involved.
Therefore, I would recommend simply following #1 in your plan of attack. Do a LOT of studying so that you understand the business and THEN put together a business plan. You are not going to get enough info from listening to free podcasts to successfully start and run a business. If you follow your own advice and read pertinent books, join your local REIA, read the archives on this forum, etc, then in a few weeks you’ll have the knowledge to put together a real business plan.
[ I would take a second look at your process of choosing contractors. Any reputable contractor would not take 20%-50% off his price to get a job. After all, they are running a buisness (just like you) and need to make overhead and profit within certain margins. Anyone that would mark-up significantly enough to knock off 20% to 50% and still make money would be suspect. I think that you will find that if your going to call 6 contractors, you’ll find one at a high number, one at a low number, and the rest in the middle somewhere. Chose one of the middle contractors. Remember, you get what you pay for and the lowest price is not always the best value. Good luck!
Thanks for the replies/advice I’ve got to run off to work but I’ll respond later in more depth.
Ok sorry about the delayed response but with my internet being screwy and my job giving me extra hours its been hard to get on.
Ok in response to PropertyManager: Thanks for your help and I’m sorry you view my knowledge as superficial but its my fault I let my post come off that way. As far as the strategies from the podcasts I know its all theory and I didn’t mean to sound as if it was the gospel truth. The tactic to save money on contractors works but as far as 20-50% that can be a bit off depending on the area and the job. In the Kansas City area a lot of contractors really inflate their prices so getting 40-50% off could be realistic even if the norm was lower. My college town is much smaller than KC though so savings of 10-15% are more likely to take place at best.
It looks like I’m going to miss the REI club meetings this month due to work but I’m going to make sure to get the next ones off. I’m trying to contact the people that run it via e-mail to see if I can meet with anyone that can lend me a hand. Oh and my friggin Carlton Sheets from e-bay never arrived so I’m busy getting my money back from that. Currently my knowledge stems from Rich Dad Poor Dad, Parent, Millionaire Real Estate Investor, and I’m almost done with Flip.
In Response to Mcprops: Thanks for the advice and what you said about the middle contractor was what I was trying to get at but I guess I didn’t come across that way. I also addressed your concern about the discount above so I hope that helps you understand where I’m coming from on this.
In Repsonse to TMCG: I agree it is a lot but I was just stating my overall goals/ideas. Business background…well my father and his father are both very business and traditional long-term safe investor savvy. I seem to have a little knack for business and always understood and exceeded in my business classes in High School and in College which I’m still attending. I’m studying Airport Design which is basically some aviation classes and business classes rolled up into one degree.
The IRA’s & 401k’s are managed through the IRA firm. What happens is they don’t give any money directly to me it is sent to the closing table and that is where I receive it otherwise it violates IRA regulations. So if a property cost 50k and I needed 20k for repairs then I’d have 70k go to the closing and only 50k to the original owners and the 20k would go into an account for me to pay for the repairs. Thats the general idea but I’d need to contact the IRA firm to get the specifics.
No I haven’t consulted anyone about SEC rules yet as you can probably tell I’m still in the beginning of the planning phase.
I agree it is going to take some time so it will be interesting to see where I’m at in 5 years…I sure hope I’m not a section 8 tenant of Propertymanager cause I don’t think he’ll put up with my bullsh*t.
I keep forgetting to let you all know my Fico is 724 or 723 depending on which agency I pull it through. I’m a student if you didn’t already get that and have about 1/2 to 1 year left of school. I currently work at the local Walgreens as a Cashier/Customer Service Person/Trouble shooter. Lowest paying job I’ve ever had and some really scandalous shiznit goes on there so I’m looking for another job after I use up my 5 vacation days. I’m going to really try and get a construction/labor job for the summer so I can learn some more handy man stuff and be outside. My dad could probably hook me up with one since he knows a lot of contractors through his job but then I’d have to drive 2 hours round trip everyday so I’m looking local first.