So I’ve been reading and talking to people. I’ve got 3 different realtors - 2 in my area - and one out of state - already working with me. I’ve got my LLC ready to be published (NY requirement), I’ve got one attorney (who I’m not thrilled with - he’s not a creative-minded RE investor - but he is a RE investor). And I’ve got a CPA.
I am just about to the point of learning about CONTRACTS. Honestly, I have been intimidated somewhat by them. I have been toying with the idea of doing what my lawyer said, just make offers, let the seller send you a contract and then bring it to him to make appropriate adjustments. But so much of what I want to do is not going to be in a standard contract - so how does this work?
I’m a pretty quick learner. I feel I can talk the talk…to a point. But it’s the simple things that I just don’t have a working knowledge of, that trip me up…like:
Notes - when I secure a note with…say a tax free bond - does this mean I write this in the note, pay for the bond and give it to the seller - and that’s it? How are promissary notes recorded?
Contracts - AAALLLLL the stuff that goes into a RE contract - seems like SOOOOO MUCH.
I’ll stop here, cuz you’ll get the point. When do you make your move? When you understand thoroughly, all that is in a RE contract and the laws surrounding it - or do you just find the properties and leave the rest to the lawyer and CPA?
I just want to start buying properties!
But I guess I’m scared. Plus, living on Long Island does not help. A rehab costs…300k…and the market seems to be cooling a little - here anyways.
You have the props but none of the tools. You have to make a plan. Do you plan to flip or hold the properties. I recommend holding. Remember, your property is an asset – now it’s up to you to manage it so you make the most money for the least effort with the least liability. How do you plan to hold it? Rent it, lease it? Triple net lease it? Put it in a land trust and equity share it?
It’s good that your LLC is ready. You don’t need the attorney nor the realtors at this stage. Don’t put the cart before the horse. You don’t have to know what is in every contract. You have to know what that contract will do such as secure an option.
You have to first study and understand the system you decide to use to achieve your goals. Read and ask questions. Good luck to you.
“Just Do It” is great advice when it comes to buying tennis shoes, but very poor advice for doing a major investment or starting a new business. I’m not saying that you should spend months studying, but I am saying that you should do whatever is necessary to understand the basics of investing and come up with a plan. I recommend writing a business plan so that you have a well thought out, specific plan to follow. If you are really dedicated, you could do everything in a week including completing a basic course on real estate investing and/or reading several books.
When do you make the move? I love the question. It wasn’t along time ago that I was on the asking side of this question.
Here’s my answer.
When the numbers and your instincts and your professionals say it’s a good deal. and…
You have a paralyzing fear that you will end up in debtors prison with a huge mortgage on a property that fell into the ground after you threw the kid’s college fund into fixing it up.
It’s usually fear that keeps people in the wannabe or newbie stage. Not the absence of deals.
That’s why people say Make offers Make offers. If you keep making offers you become comfortable with that stage and then the next and so on.
Also, there are usually several exit points to a deal if you become uncomfortable. And if you are out of exit points, you have an attorney. You may lose a deposit, not your life.
For me it was all about overcoming the fear. Before I was an owner, investing was this big unattainable awesome thing that had the potential to make you rich. Now it’s kind of like playing monopoly for real.
Just as soon as you figure out what that move should be. Getting in over your head on the first deal is the biggest mistake a new investor can make. Take your time, know what you want to do – then do it. Good luck.
I am dedicated to this. But I want to get it right, right off the bat. What I mean by that, is I want to find the niche that speaks to me, then go out and do it. I am over halfway through the Sheets program - I’d say by next week’s end - I will be finished with that. Then it is on to suring up my LLC - and my complete understanding of Financial Statements - both personal and business - which I am currently working on.
I plan, PLAN, to close on my first property by 7/31/06.
I am also looking into obtaining new employment in the field of RE - most likely - mortgage loan consultant or appraiser - what ever company offers training and nothing more than 10k drop in my current salary - temporarily.
Hopefully, I can quit within the next 6 weeks. Get the new job, either F/T or P/T - and divert more of my time to my business and my goal is to have the new job offer opportunity to grow within RE field.
As for as REI - I’m going to go with bread and butter -
3 Br, 1 ba - that offers the best rent to value return. Get some monthly cash flow going and down the road, turn toward other investments.
Now my main concerns are asset protection, where to invest, and how to acquire properties the way I want to.
I do not want to use property mgt comp’s - I want to own prop’s with tenants who sign Triple-net leases. I would like the asset protection of Land Trusts (which includes prior).
I want to invest in appreciable areas. I want to purchase a property with at least a 1.0 rent-to-value ratio (rent income divided by price). I do not believe I will purchase one property until I find one that offers all of these.
While all of this is going on, my fiance and I are looking at homes and probably will purchase one within the next 3 months - through conventional means…lol
