Attracting Partners

[TMCG]

When should I advertise or network for partners?

Basic Business plan:
Buy a property all Cash
Fix it up
Rent out, and refinance
Buy another property with funds from refi
Fix it up.
Rent it out, and refi

Repeat.

(the above compliments of Visual Underworld     )

I'm waiting because I want to be assured that I am ready to talk the talk...

I'm looking for a paralegal/lawyer and a realtor (i've been thinking of pursuing getting my realtor license as well).

Team will look like this:
Lawyer - to handle legal for company    
Realtor - to receive commissions
Contractor - for the obvious
Developer - to grind out the deals and be the salesman.

Minimum investment 20,000

so now, my question again - when do I start pursuing these individuals.

How do I start?  - I thought of advertising:
Partners wanted
paralegal/lawyer and realtor wanted for business team
call XXXXXXXXXX

Thoughts?

[JLMarshall]

Just call them and tell them what you're looking to do.  The best way to get good at marketing yourself is just to do it.  Take copious notes as to what questions they ask you, what seems to be of the most interest to which professional, and what seems to be the point where they make the yes/no decision.  Also, I see you forgot your trusty mortgage professional    But seriously you might want to find someone who's comfortable with no point loans, so that you don't have to waste capital on your short-term deals such as flippers.

[NoMoneyDown]

It's kinda funny, but once you find one professional - be it the lawyer, or the CPA, or the RE agent, or whoever - who understands REI and YOUR goals, the rest seem to come out of the woodwork as if by magic.  For instance, I found a loan broker who caters to REIs through a member of my local REI club.  He in turn referred me to an exceptional  RE agent.  She in turn referred me to a good property management company.  I also found a couple of good RE attornies via the same REI club.

[propertymanager]

TMCG,

The question is what you bring to the table.  Since you're a newbie, you don't have experience.  If you don't have the money either - what do you have?

Personally, I'm very careful about giving money to anyone.  I wouldn't want a partner without experience or money.  So the trick is to determine what you can bring to the table.  Moreover, if your goal is to operate rentals, having a partner or partners just dilutes the profits.  With a partner or two, you could easily need hundreds of rentals to make a living.

Good Luck,

Mike

[aak5454]

prop. mgr is right on the money (no pun intented) about partnerships and the need to bring something to the table.  Also, there is the issue of creditability.   Lets be honest, in this world, you start at zero in the creditability scale and work your way up.  One of the ways to overcome this is to work with people who were referred to you thru a mutual associate.  It breaks the ice and allows you to build from there.

If you want to get started, then go out and do a deal yourself (i.e. get a loan, put some cash and sweat into the project) and gain some experience.  

[TMCG]

prop,

i have some money - my 20k or (1/5th) - plan on 5 total partners.

i am consistently faced with this same problem.  if i invest out of town - everyone says don't do that.

well i'm not moving so...

if i invest in my local area - i need a very good operating fund to manage properties.  in my area of the country, even foreclosed homes will run upwards of 170k...maybe 140k if you're lucky AND MOST hover around 225 and up.

to invest here locally, i need 100,000 in the business bank.  i am not going to use my business cc or at least i'm not going to depend on leveraging myself to the tilt in order to run a real estate business.  with anything less than 100,000 - if one BAD thing turns up, as it most often does in rei, my business must be able to handle that.

so...i want partners, because for me to raise 100k will take a minimum of 2 - 4 years.  that is not practical.

or...

i could stick to my stated business plan and conduct business in other states - OUT OF TOWN -  without excess partners (just my brother and i) where i can pick up a duplex for 25k and have the Debt to Income ratio's that make sense and are not bordering on insane.  rehab refi and rent - repeat.


thoughts???????

[JLMarshall]

If you have a 401k or IRA with the $100k you need; use that.  You could then accomplish gaining some experience, having a little more skin in the game, etc. etc.  I'm not talking about withdrawing, borrowing, or anything else that's going to create either a taxable event (unless you go from traditional to ROTH, which I would) or penalties either.

[REIMan]

TMCG,

It sounds to me that your niche market is buying foreclosures or REO's.  If you structure the deal right.  You could get a hard money lender to fund the deal completely and you don't have to come out of pocket at all.  Most hard money lenders fund the DEAL not you so you don't need $100k in your account.  You should also look at wholesaling as a way to start where you assign your contract to another investor.

Make contact with all of your local REI Club members so you can call on them as your buyers or in a pickle they could be your partner.  It's better to have options whether you use them or not.   I even called a few investors from these forums just so they might recognize my name if I ever Needed them on a deal.

[propertymanager]

TMCG,

Yes, you are in a self-induced pickle.  Prices are high where you live and you don't want to move.  It's extremely difficult to manage properties long distance, but that seems to be your plan.  

For the record, you don't need $100K in the bank in order to invest.  If you find the right deal, you can certainly invest without any of your own money being in the deal.  Will it require some work?  Yes!  However, these deals are out there - you've just got to find them.  Get out there and meet people - that's the key.  Like REIMan said, start with your local REI Club.  Other investors are excellent sources of deals.

Mike

[TMCG]

right.  i have been putting off joining my local rei club.  

i have spoken to a bunch of realtors and mortgage brokers/investors in my area

guess the next logical step is to touch base with a wider pool.

honestly, this forum, for as much time it consumed of me when i first discovered it, has been great and i appreciate all of your help.

this forum led me to my biz cc with a very nice credit line for my business - Wells Fargo - Justin - he's the man!

thanks all...

[ctguy]

Just my two cents, but in my experience partners=trouble
You said:
Team will look like this:
Lawyer - to handle legal for company    
Realtor - to receive commissions
Contractor - for the obvious
Developer - to grind out the deals and be the salesman.

If I may,
Your Attorney is safest if he is hired, not partnered. You can find one proficient with real estate simply by asking. Use the phone book and stick to heavely populated areas or fringe areas. Do you use an Accountant? He should know exactly what you are planning to do and, if he is worth his salt, will know the appropriate Lawyer, or Pit Bull as I like to call mine. By the way hiring the wrong Attorney can be expensive.

As for realtors, I hope you expect more of them other than just collecting commisions. Work with as many as you need to. They will say they can cover your full area, but you will find they are town/demographic specific. There are also two kinds of realtors, those who list and those who sell. Plus I've always felt it a good idea to change signs when flipping properties acquired from realtors.

Contractors? You'll like to have a GC, ( General Contractor). He's the guy who will coordinate the rest of the sub-contractors, i.e. roofers, electricians, plumbers, floor guys, painters, etc. He is the guy you want to partner with. The ONLY guy you want to partner with. You can find him by asking at jobsites in your target neighborhoods, he won't be there, but you'll get a name and number. Ask at the local supply house, Chamber of Commerce, even the local bar with all the trucks in front at 5:30. Hopefully he won't be there either, but it's almost garranteed that one of his Subs will be.

And that leaves the Developer. Guess what, that's you. You can now officially add "Developer" to you business card. You don't need to be building sprawling subdivisions to be a developer.

If you are indeed going to buy and hold, the profits are long term. I don't know of any GC's interested in partnering with anyone to do that. If they want to be a landlord, they usually already are. Plus if you are just getting started why not fix and flip (partner with a GC), or wholesale to another investor or GC. That way you can build up your capital for a long term buy and hold strategy without the use of partners.

From what I have learned the formulas are the same for any price market. You just need to find the deals before anyone else does, so stick to the areas you know best. And the old rule applies: never use you own money!

I don't know what state you are in but I'll bet Brookview Financial is there. They've got your money, it may seem a littlte pricey, but they will cut you a check tomorrow.

Well that's my two cents. I'll bet you have a property or two you have been thinking about? So talk to as many small private mortgage companies (rich people) as you can, have a beer with the boys at the bar, and get out there!


Cheers!

[TMCG]

pardon my ignorance.
 
what is a "pm"?

[ctguy]

Sorry, private message/ email.
What state are you in?

[kdhastedt]

Using the term "...send me a pm with your specifics and I will see what I can do..." is a violation of Forum Rules (it is the same as a "contact me" post...) and will be removed when found.  PLease refrain.

Keith

[TMCG]

ahh.

i am in new york - long island.