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Hello guys,
My name is Dakota and I’m a newer member to the group. Real estate has been in my sights for a few years now and I’ve always made excuses as to why I couldn’t build a stream of income from it. I wanted to evaluate my situation with the group and get a plan of attack going to help me get started.
I’m a 1099 contractor, so any traditional financing is out of the question. I’m also not really interested in residential real estate (multi-family aside) and more or less want to play in the land and commercial game.
Seller financing or OPM are the two big options that jump out to me. Since I’ve joined this group, I’ve actively been searching for owner financing options and feel that I’m making progress. I also have cash reserves, liquidity (that I would prefer not to use), $20,000 in my Roth IRA, and probably up to 100k line of credit I could utilize as well.
Part of me says to start with doing assignments where I can make a little change here and there while I hunt down commercial/land deals.
My questions are: where should I start?
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Hey Dakota, I’ll defer to Tom if he responds but I’ll add my two cents.
Don’t touch your cash reserves or line of credit yet. Better to get a few deals done and play with house money than overleverage yourself.
Roths are great for long-term deferred gains and you should revisit it with your CPA after you’re up and running (Mark Kohler has great videos on youtube about maximizing roths – check him out)
That said, the funding/terms/structure of the deal only matter when you have a deal.
Find a deal. Lock it up. The money will be there.
There’s no wrong place to start.
SFH are easiest to find, value and assign – driving your neighborhood and studying sold prices on zillow and redfin is free.
Land could technically be started with a couple grand for mailers and a desert property, but finding the right county and scrubbing the list takes time and disposition can be longer because of title companies.
Commercial assignments do happen but those owners are harder to find and make offers to compared to home owners.
My first deal: On my way home I saw an infill lot with an empty “for sale” sign holder; must’ve been knocked out from a storm weeks before. I thought it might an absentee owner because someone local wouldve fixed it. Looked it up on propstream, saw the owner lived out of state and had 4 other lots in my city. Checked the tax assessor’s site and he owed taxes and hoa fees on all of them. I sent him a letter with a serious but low offer for all 5 and he accepted – he was tired and wanted them gone.
So for the price of propstream and postage, I locked up a deal. And it was such a no-brainer that if I couldn’t have closed, I would’ve found a money partner to take half or pay me to walk away.
Point is: don’t worry about the how, worry about the deal. A good deal will let you screw up every step of the way and still get paid.
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