I am currently interested in investing in real estate; however lack the capital to actually invest myself. I still decided I wanted to get involved and learn about the market (by reading books, but more importantly getting some real time experience). My plan is as follows…
I plan on using pre-foreclosed data through services like http://www.realprophet.com or http://www.foreclosure.com, and then doing the necessary research to obtain the comps, demographic analysis, profit ratios, and costs. I will also take care of the negotiations with the owners of the houses. In essence, I am merely giving the investors a referral/lead (with detailed spreadsheats and presentations of the specified properties), in which I would take either a lump sum or a percentage of the profit once (if) the sale is completed.
My plan is merely a rough, and definitely needs some fine tuning, so any advice you guys could give will be of a great help.
Your plan sounds like a great idea. Do you already have all the information sources you need ready? Where do you plan on finding nvestors?
yeah i have all the information sources lined up…my next series of posts are trying to gather information on networks of investors. Thanks for the input!
Kent
sorry to rain on your parade but you have a few additional things to consider. For example, if you talk to people in foreclosure and then turn them over to an investor you can be viewed as an agent. In Calif, for example, you could be violating the law unless you handle things properly.
The other things you will offer are interest but I think you will be disappointed by what people will offer for your service that take a lot of your time and effort. Serious investor alreayd know what a propety is worth and thing like demograghic will not chnage their buy/no buy decision
Just some thought from a guy doing REI for 8 yrs. in many different states
Im actually still in college and just trying to find a way to get involved in real estate, so when i do have capital, i will have a network already in place, plus the know-how to invest wisely. If you have any other suggestions they would be greatly appreciated! Thanks for your input and being honest, that is what i value most.
Kent
Kent,
your business model appears to parallel that of being a licensed agent, with that said, it does require a license in most states to do what you propose. You are after all offering a service of “expertise” and will require errors and ommissions insurance. If you have read many posts here you realize alot of investors do not actually want to pay for that expertise, ans rightly so to someone who knows less than they do about investing. I am an agent who loves to help people find their dream home, but have no knowledge nor desire to work with investors, find your niche and make sure you have the proper training and credentials. This site provides education to a point, but alot of good insight as well.
I would really recommend reconsidering this approach unless you want to get a RE liscense. In PA you could be seen to be breaking the law by practicing real estate w/out the necessary liscense.
If you still want to go down this path, I’d suggest that you first talk to some local real estate brokerages, see what local classes are offered, take the necessary courses and then pass your state’s exam. Then you can legally enact your plan to start investing.
Start by reading your local State and county guidelines so many of us forget that no matter what you forget the laws are the most important! you do not want to end up in court looking like this guy:bash: