I have been reading everything and anything I can get my hands on to understand what a real estate investor is all about, as it looks like many others have. One of the first big things is to assemble a team, which I have done.
I have a gentleman who may be willing to put a large amount of money into my efforts. I need to tell his partners my plan. Nervous? Uh…yeah!
My plan is this.
Market to homeowners in foreclosure. If equity position, sub 2 deals and start to create a portfolio of L2O properties.
If short sale, because of the amount of money invested, I believe flipping the house quickly would be a wise choice. I am assuming he won’t want to tie his money up on a short sale and hold.
He is a Broker, has been for many years, but focused on raw land. The foreclosure game is new to him also. If we are going to have our own rental (L2O) portfolio, I think it makes sense to manage other rentals also.
Does this sound good? If I can make it sound like good business sense, I’ve got the money.
Also, he asked me if I had $500,000, what would I do? I’ve got all the marketing in place and the backbone of the company is ready to roll. My answer was to pull the trigger on a deal. He liked the answer.
You said you assembled a Power Team. Do you have a broker with money.
Do you have a realtor with a speciality in foreclosures or wholesale deals, a CPA, a Lawyer, maintance man, ins agent, etc… that is a team…
Now go out and learn the business. Attend a local REIA meeting. Find someone to mentor you in the field your interested in. I would not recommend doing a deal till you know what your doing. if you screw up, most likely your partner will not fund outher deals.
aznorthstar,
Piece of advice…If you have found a well funded investor I can assure you he/she has other friends who are just as well funded or more…Point being make sure you are ready to allocate funds correctly and never seem anxious to buy …Well heeled investors like to see a patient,disciplined person handling their money…You do right by this first investor money will not be an issue for you because rich people love to brag how and where they are making side money…So keep yourself grounded and focused to do this…
yrush…to answer your question, yes I have a power team. I have the broker with money (thus the reason for this post), I have a realtor who is experienced in foreclosures, a CPA (he’s been our CPA for years), a lawyer who specializes in real estate and landlord issues, an insurance agent who has worked with investors for a number of years and a maintenance man.
I don’t understand why you would question what I said and not address the point of the post. I appreciate anyone’s point of view, but I believe you missed the point of my post.
I understand it is difficult to see the entire picture being it is only words. I have done deals, no money no credit. I did a short sale a month ago, and the bank did not require funding! I had thirty days to find an investor.
But this is a lot different. This opens up doors I have not had the opportunity to walk through. That is why I was looking for somone’s opinion on the topic.
I agree with Yrush and RookieNYC. From my perspective, the very fact that you are asking means that you are a relative newbie. I think that’s where they are coming from also. In addition, what you said is very vague. Your plan does not contain specifics, such as a percentage of equity you will require or a specific profit margin you’re looking for. Moreover, I don’t know why any investor would be so specific as to the type of deals you will do. I would look for any deal and not specifically target foreclosures. Every seminar newbie in Arizona is going to be sending out their mailing to foreclosures and the vast majority of people being foreclosed on are upside down anyway.
If I were writing a similar plan, I would concentrate on the DEALS, not where the deals are coming from. It would certainly be ok to include foreclosure mailings as part of your plan, but I wouldn’t make that the focus.
Finally, when you’re dealing with other investors, you need to be SURE that the deal will make money. When a deal goes bad, your reputation will be ruined and you are highly likely to be involved in a lawsuit.
Make sure your CPA is well versed in the tax implications of being a dealer to real estate. If he/she isn’t then you don’t have the right person on your team, especially if this CPA is also your tax preparer.