The wife and i just spent thirty thousand dollards on a course to become real estate investors and with that we had classroom training on all the ways a real estate investor can make
money from wholesaling,rehabs,flips,buy and hold etc… and the company also has a lending program that we can use if the numbers work for that deal. During our training i asked the
instructor how the financing worked with people who don’t have any extra money other than their monthly income. The look i got from the instructor pretty much answer my question
and said about the only thing you can do is wholesaling to other investors and build up your cash reserves so i can be able to do some of the other things we have discuss. I feel like a
total egg head, the wife and i were under the impression that if the numbers worked the parent company would fund our deals regardless of our personal finances." So my question is this, can any one offer any good sound advice on what i need to be doing so i can better understand the real estate investors needs and what areas i need to be spending my time on.
I am 62 years old and spent what little money we had save thinking that in a couple of years of doing this it would improve our funds for us to live on when we got older. :banghead2
For $30K you should have received more informed feedback than that.
You’ve got more options than wholesaling.
The issue is that each option has its own set of protocols and peculiarities to understand.
You also need an accelerated plan to pull off anything close to what you said you want to do.
It also requires a tight focus on one objective, to the exclusion, if not sacrifice of pretty much everything else. Think about what you’re willing to trade, to get what you want. You will trade ‘something’ because your 62. Tick Tock goes the clock.
If you were 20, I would say ‘you’ve got time’. However, since you’re 62, you’re on borrowed time financially speaking. That is you have to make up for the time and money you blew on $30K worth of training that left you with no money and bad advice.
BTW, your goals are as vague as they get. Tighten those up, and be excruciatingly specific. How much money? In how many months? If you don’t answer those two questions at least tentatively, any old time-frame, and any old amount will be ‘adequate.’
That said, I would not wholesale. It sounds good in principle, but from experience, unless you’re going at this full time, and full throttle, there’s too many amateurs chasing too few deals, and paying too much.
Meantime, rehabbers are falling off cliffs all over the place, because of a lack of inventory. Rehabbers depend on wholesalers for deals. Think about it.
This isn’t a universal problem, of course. It depends on your market.
I have no idea about your market. Maybe it’s fantastic. However, your question doesn’t indicate that you know what’s going on in your market.
BTW, to answer your question, assumes you are gonna go at this full throttle:
Find a deal.
You don’t ask the rehabbers what they want. They all want something different.
You find a deal marked down at least 20% of ARV less expenses (and if you don’t know what “ARV” means, then I don’t believe you actually spent $30k on training).
Meantime, you advertise the deal on craigslist, you pound bandit signs in the yard, and on every major corner within a mile (or five miles???) of the house, and then sell to the first buyer with cash. Your most likely buyers are already hunting in the area you’re selling in, so get your signs up.
Meantime, you’ll get all sorts of other buyer’s numbers and their requirements, but mostly pay attention to the ones with cash available for deals. Rinse and repeat. The repeat part’s a bitch.
You plow your very first profits immediately into direct mail. You mail to every usual suspect; absentee owner, code violator, landlord in court evicting deadbeats, and all the other places you learned to find suspects in your $30K training. You plow your very second profits into even more direct mail. Enlarge the list, and continue sending once a month.
Once you’ve established what your conversation rate is, you can scale up with certainty and create a budget for marketing. Then you begin getting repeat business, networking with wholesaler wannabees and stealing their deals (just kidding), and getting agent’s pocket listings, and stealing those, while making all the amateurs really irritated, because the steal deals on the MLS are getting scooped up by you …before they ever get to the MLS. What?
When you’re spending about $30,000 a month on marketing, you’ll be netting about $300,000 a year. In the meantime, you’ll have hired a small team of “closers” that work on commission, and you hire a guy to operate your business full time, and you become a business owner that wonders why he didn’t think of doing all this twenty years earlier.
This is a real example I’m giving you, based on the current experiences of a former, wannabee-wholesaler, friend of mine.
The other example is me. I decided to buy ghetto-area apartments from ‘too-old-to-care-anymore’ owners, from ‘too-incompetent-to-manage’ owners, and the ‘too overwhelmed’ owners, by agreeing to their prices, in return for my
‘no down’ terms. I went from no units to 50 units in 18 months, and it grew thereafter. The first 18 months were a whirlwind of experiences.
Or you could flip the financing on houses no investor wants, that lots of wannabee homeowners with tens of thousand of dollars for a down payment would kill for. I do both of the last two things.
You can do any of these things without down payments or credit. It just depends on what you like doing the most. However, you really need some marketing money to overcome inertia and create a critical mass of momentum.
I should teach a course on this. :beer
You want someone to “offer any good sound advice on what i need to be doing so i can better understand the real estate investors needs and what areas i need to be spending my time on”???
You spent $30K on training to become a real estate investor and you have to ask what to do? They also led you to believe they’d provide financing and then they denied it?
That’s ridiculous. Demand your money back or file a complaint with state regulators. If they don’t give it back to you, talk to a lawyer and sue for your money back.
I agree with the last comment, I’d suggest trying to get your money back any way you can. If you spent $30K and all you got is general information about all the different investing techniques and still don’t know where to start, it sounds like you were taken advantage of. It sounds to me like you would have gotten more helpful information for free on the internet, such as in this forum.
For that amount of money, I would expect to have the “guru” on the phone with me, closing deals and have deals under contract before the program is over.
I would suggest this action plan:
- Get your money back, whatever it takes.
- Decide on 1 method of investing that you want to focus on. That means: Do your research. Read free information on the internet from respected authorities, ask questions in the forums. Decide which approach will work best for your situation. My thinking is something that won’t take much of your own money so that you don’t have everything wrapped up in one property.
- Invest about $200 - $1,000 of that into a course that comes highly recommended by experienced investors (ask in the forums for suggestions), which will teach you in-depth how to do that technique
- Put the other $29,000 of your money into an account that earns decent interest but still leaves it available to you.
- Start off with some low-cost marketing techniques to get the ball rolling and get some practice
- Find an experienced investor who will take you under their wing and help you. This means someone who is doing deals and who isn’t just a “guru” who teaches investing. Some investors might be willing to work some sort of profit sharing arrangement where they get a percentage of your first deal(s). In some cases you may need to hire someone as a coach. But don’t spend ridiculous amounts of money on it. Maybe a couple thousand.
- Gradually increase your marketing budget as you start to see what’s working.
Keep the majority of your money in a safe place that’s earning interest until you need small amounts of it here and there to fund marketing and to run your business. You’ll have some upfront expenses to get things going, but nothing near what you spent.
Where have you seen this work?