New Investor Finally Getting Started

Hello Everyone, I have been reading the forums for a while now and I finally convinced myself that today is the day that I start in property investing. I am 22 years old, currently in the Telecommunications field. But after doing this for 3 years I am burned out and I think it is time for a career change. I have always wanted to make a career out of property investing, but I always thought you needed money to make money. Well flipping properties definitely changed my mind. I have listed some things to do and have done below, if you think I need to do something that I missed please help me out, thanks!

List to get started:

  • Ordered dedicated phone line
  • Purchased fax machine with voicemail
  • Filed for S- Corp (Legaspi Property Solutions, Inc.)
  • I will be calling local ads (We Buy Houses) to see if I can contact them in regards of future deals.
  • Attend local real estate investing club to meet investors or rehabbers and obtain deals
  • Advertise in News Paper (I BUY HOUSES)


  1. Do you guys think it is a good idea for me to call other ads to see if they might be interested in buying some of my deals? If so, How should I approach them? I know some of the ads are from dealers like myself, how should I handle this situation?

  2. I am still confused on doing comps. I know a realtor friend but I have not really approached him about this. Should I ask him for comps in the area that I am interested? How do I get realtors to help me obtain with deals? Or how could I compensate them in their time?

  3. Is there another way for me to get comps other then getting them from a realtor? I have access to the property tax appraisals online but the assessed value they have listed is way below the actual retail price.

  4. when I find a property that is listed with a realtor, how does the realtor get paid?

  5. When I have a property under contract do I send my contract with the earnest money to the title company or do I wait until I could find a buyer to assign my contract to and then give all of the documents to the title company?

My plan is to assign my contracts to investors until I could purchase and rehab them myself. What else do you guys think I should do to get started? Thanks!

I am still re-reading William Bronchick’s Flipping Properties Volume 1. I hae learned alot from this course but I could not say that I know exactly how everything works. I will be re-reading the course again to get a better understanding.

Howdy Pinoydarv:

  1. Networking is where the action comes from. Word of mouth is the best form of advertising as everyone knows. If Jim knows Bob and they both know you then one of the three of you may have a deal that is doable and so on. If they too are dealers they can buy from you or you can buy from them. Just be friendly and let them know you are there. Send an email after your conversation. Meet them and buy them a lunch. Get some business cards too.

  2. Best to get comps that have sold and closed. Second best is stuff that is currently listed. Always be looking at stuff that is available. Dale Carnege said it best “Know your market 100 times better than you need to.” You can get these comps just by driving the neighborhood.

  3. Use tax appraisals only as a guide. I looked at a house recently that had a tax value of $2000 and the seller was asking $20K. I did not even get out of the car.

  4. Usually the title company pays the Realtor at closing. Sometimes Realtors will bow out if there is a foreclosure and not enough to pay for their services or they were not the procuring cause of the sale. They may also discount their fee in special situations.

  5. Send contract to title company asap. You want to know of any title issues asap especially before you spend a lot of time and money trying to sell the contract.

  6. Why not do a deal without flipping. What is stopping you. Experience, money , credit. All just excuses. With a burning desire and a knowingness that you can do a deal and a crystal clear vision of yourself doing that deal and you will do the deal. If you know you can not then that too will come to pass. Any obstacles are just in your mind.

  7. William’s course must be great. I have heard a lot of compliments about it but have not taken it. He seems really knowledgeable with a lot of good ideas.

Thank you Ted! I have owned and ran my own business before but for some reason this business intimidates me. I think it’s the fact that I know that I really dont know much and I am nervous if I get call from a motivated seller that I would sound like an idiot. But you know what I thought to myself, when I started my business beofre I didn’t know much about it either. I had alot to learn but all came together by actually doing it. Today, my goal is to get my corporation paper work ready and sent out. Also, to come up with a marketing plan. I spoke with my lawyer today and he said the best thing for me to do is open an S-Corp. Also, it is going to cost me around 300.00 bucks to do so online. Do you guys this is a good deal? Do you guys have some ideas on what to put on my ads on the newspaper? Thanks!

Howdy Pinoydarv:

I am sure it is $300 plus your states filing fee. Texas filing fee is $300 I believe. This is not something you need to get started. You may want to wait until you have done some successful deals before spending the cash. There are many new investors with shell corp’s sitting in their drawer that never did one deal.

Are you sure you want an S-Corp. That is just a pass through entity. Meaning all income just passes through the company to the individuals. Meaning you aren’t really protected from a liability standpoint. You still have to claim all the taxes yourself, etc.

In my endeavors I have found that using a blend of different entities has been the best for both Liability and Tax purposes.

Ted is right that you don’t need to do it to get started, but it is good to have a plan set forth.

Donna Fox, an attorney and investor, has some great audio from a presentation she gave. It was on what she called “PREMES - Professional Real Estate Multiple Entity Structure”.

Pinoydarv -
Hi, I’m a beginning investor as well watching, reading, and listening to everything I can to soak up the info. I’m looking to start here shortly as well. Flipping properties is a great way to start (to make some additional start out income as well as learn the ropes with little risks). It’s also good to see another pinoy investor out there (assuming the “pinoy” in your username means what I think it does). I think you’re on the right track with the items you listed. Having owned my own business in the past (not in real estate) I’m always in the state of mind of saving money where I can. I have a few questions…why get another dedicated phone line? Are you completely against using your cell phone (assuming you have one)? Also regarding the fax machine…save the money and use your computer with “faxing” SW to help cut costs. If you’re just starting out, and you don’t plan on faxing everyday…then I would skip that for now. At worse you can just go to Kinkos or something equivalent to get a fax out (if you don’t have a computer).

Regarding your question on forming online or through an attorney…I’ve always been torn between that. I’ve done a lot of research and several online forming agencies are very compentent and worthwhile in saving money. However, I found that your first real corporation should be formed by an attorney. You’ll get all your questions answered, ensure that it’s completely setup correctly, and have an outside counsel for any of your legal questions. From there, whenever you want to set up another corporation, go through the online agencies. All the paperwork is virtually the same, you’ll know how it’s supposed to be set up, and you’ll save money. To me, the upfront cost of an attorney to correctly setup the corporation is well worth it’s weight in gold, not only for the peace of mind, but also for the correctness and access to legal counsel. Good luck with your endeavors and I hope to be successful in real estate as well.

4R Management -
I don’t understand why you say that an S-corp doesn’t give you some liability protection. Because it’s a pass through entity, you don’t really get any tax breaks, however one’s attorney can structure the LLC or S-corp so that it’s completely separate from your individual assets. If you form a corporation or LLC and treat the entity as a separate entity, it would be very difficult, if not impossible, to go after your personal assets. I’m just going off of what I’ve been told by my attorneys. If I’m missing something I would to gain your input on it. Unless your talking about the assets Pinoydarv is transferring into his S-corp. If so, my apologies for confusing the matter…

Everday is a learning day…

I think you left out the absolutely most important thing to do when starting.
You need to see 100 houses in the neighborhoods and price range where you want to buy.
If you dont see this many houses you wont be able to spot a great deal when it finally arrives.
Second, you need a system of making at least 25 offers a week on houses. This fact alone is the number reason for success. The only way you can fail in this business is to not make low offers. Doing all that stuff is great, but everything will never be perfect.

Find a deal and someone you trust and give them a piece of the action to take you through the steps. Bottom line is everything in this business is easy in my opinion except finding motivated sellers.

Good luck and good hunting.

Wow, you have a lot of questions. I will address just a couple of things.

1- I didn’t catch what state you were in, but in Florida filing for a corporation on line should cost you UNDER $100.

2- Building your buyers list, you might want to call Section-8 landlords for your median and below priced houses. Just identify yourself when you call and ask them if it is ok to call them if you get a great deal where they could make some money? I doubt anyone will say no. Once they say the obvious, YES, get ALL their contact information.

Good Luck!

I was reading the posts and have a couple questions myself, when should we get a corporation, and what’s better and LLC or a S-Corporation, and what’s the difference?
I am new also, and so far I have four single homes, but I got between $70,000 to 150,00 profit on each,not bad for not knowing what I am doing ??? ;D
I am a about to work a deal on a house that needs to be sold, but how much should I offer, if the house is worth between $340 & $360?

First of all, congratulations. You have 4 properties without knowing what you are doing (your words :o) but it is about time to make sure you have the necessary liability protection as well as asset protection that you need.

If you already have those properties and have made some money, then it should not be a big expense to get Bronchik’s Complete series, the package will be $997. Go to

He and many others experts suggest to have an S corporation to do flippings and conduct your day to day RE investing business.

Then you should have LLC’s to hold properties that you buy and will keep for the long term (this includes properties you keep for only 1-2 years usually).

The best set up, if you don’t get too confused, is to buy your properties into a Land Trust (usually with an out of state trustee), the beneficiary of that trust will be an LLC. But that LLC’s member can be either another LLC or a Personal Property Trust (for even more privacy).

You would hold only ONE property in each Land Trust, with the beneficiary being an LLC which only holds that one Land Trust.

I’m not a lawyer and this is in no way legal advise, just my opinion based on everything I have read.

X Property held in Trust
123 Main Street Land Trust
Beneficiary an LLC (single member)
Member is another LLC (multi-member-but this LLC has many single member LLC’s (one for each property)
Whose members are 2 separate Personal Property Trusts
One trust’s beneficiary is you and the other trust’s beneficiary is your wife

Depending on your state this set up should not be too expensive, unless you use lawyers to set up the trusts. If you get Bronchick’s material you should have all the paperwork you need.

In Florida this would run me about 100-200 a year for the Personal Property Trusts (50-100 to pay the trustee) and about 100-200 per property per year.

It is cheap insurance, considering that this will give you almost absolute privacy and an almost iron clad liability protection as long as you don’t get sued for something you did personally.

If you were to have 100 properties, then I would probably have One multi-member LLC for every 5 or 10 single member LLC’s.

That way if you were to get a judgement against a property you might only compromise 5-10 property instead of 100. But that is a set up for the big boy players.

Get Bronchick’s material, and if you are in Florida also get Mark Warda’s books, especially the one on Land Trusts in Florida.