Realistic goal for a new full time investor? - Posted by Luke Hoppel

Posted by Joe Kaiser on April 23, 2006 at 24:11:27:

Never bought one myself so wouldn’t know.

Are you chucking darts or what?

I focus on big problems and big equities and pay attention to
situations where that scenario plays our regularly. There are all kinds,
frankly.

Joe

Realistic goal for a new full time investor? - Posted by Luke Hoppel

Posted by Luke Hoppel on April 20, 2006 at 04:11:18:

Ok, I realize this is a broad questions so I’m going to try to input as much info as I can.

I’m looking to begin investing full time upon my departure from the Marine Corps. I have a pretty good basic knowledge and I continue to read and learn. I’ve only done a couple deals which include purchasing a duplex for great cash flow and a preconstruction assignment.

I will be relocating to Jacksonville, FL to partner up with my uncle who is a full time investor there. He owns 30 houses and does a couple deals a month but is not very organized or focused in his marketing.

I plan on implementing a pretty aggressive marketing strategy which includes but is not limited to: targeted direct mail, giving free bird dog classes to recruit bird dogs, advertising in classified and pennysavers, building the relationships with other wholesale investors, and I’m still considering bandit signs, billboards, and possible radio and TV ads.

The focus of investing is basically buying cheap, fixing if need be and selling retail either conventionally or with lease options.

So now that I’ve given you a brief overview of my intentions, what do you think is a realist number of deals that will be generated via this system of marketing given the fact that we can do as many come in?

I realize this is total speculation but I would like to do 4 to 5 deals a month and many people have told me this is completely unreasonable. The irony here is many of them that told me that have never even done one deal!

Anyways thanks for the time you took to read this and any helpful suggestions you may have to give.

Luke Hoppel

is your uncle Ron LeGrand? NT - Posted by David Krulac

Posted by David Krulac on April 21, 2006 at 22:39:01:

`

Re: Realistic goal for a new full time investor? - Posted by Sean

Posted by Sean on April 21, 2006 at 14:17:37:

Well I can’t speak to Florida, other than to say I know a lot of folks who don’t live there are active there…

To pull off 5 successful deals a month, you better have at least 25-30 going at all times… I mean meat on the bone deals… Not well I got 30 calls last month.

That’s a LOT of work to do, not impossible, but a lot of work… perhaps you are better off figuring out a way to find fewer deals with more $$ per deal…

I have found folks that do lots of deals tend to settle for far far skimpier paychecks than I am willing to take per deal… I’m perfectly happy scoring 4 or 8 home runs a year vs 25 base on balls… and I make just as much if not more money as they do at the end of the year, doing a hell of a lot less work.

I know a lot of folks in real estate, but I know very very very few who are consistently pulling 5 deals a month, and most of those guys have been doing it for well over a decade, and invest in multiple markets around the country.

Best of luck to you.

That’s a plan? - Posted by Joe Kaiser

Posted by Joe Kaiser on April 20, 2006 at 17:51:37:

Luke, you’re a smart guy . . . you can do better.

This is the old, worn out, been done a million and one times approach
to buying real estate, and I seem to recall it’s popular in (and my have
originated from) Jacksonville, FL.

Why bother?

Figure out your own niche. Become expert at it and rule the
marketplace. Otherwise, you’re just another guy spending thousands of
dollars a month on hackneyed marketing techniques that aren’t
effective and force you to waste way too much of your own time.

I suggest there are better ways to get rich in real estate.

You start by rejecting what everyone else is doing and you open your
eyes, think about everything you know, and get curious about
something you once heard or saw or experienced and you start pulling
on that string until you come to the end of it and learn what, if
anythying, is there.

And you do it until you find an angle or play or niche you can hammer
away on.

Joe

Re: Realistic goal for a new full time investor? - Posted by Chris in FL

Posted by Chris in FL on April 20, 2006 at 16:18:27:

Luke,
Your plan is very workable, but not in the first few months. Some of your plans, like newspaper ads and bandit signs, might get fast response. Some, like recruiting bird dogs and building relationships with wholesalers, likely will take time to kick in. Getting 4-5/month consistently generally takes a little time. Depends on percentage that require rehab, too. If all rehabs, others mentioned, are you equipped to handle many rehabs at once (do you even have much rehab experience)? Depending on extent of rehabs, some might take 3-6 months. If they take that long, and you want 4-5 completed every month, you might have to be working on 12-30 at once - that is a major undertaking, my friend, even for an experienced investor. Plus, keep in mind, that task takes you away from marketing and hunting deals for the coming months. I would suggest planning on starting a little slower, spending as much time learning as doing in the beginning, and the increases in volume will occur naturally as you get systems into place, etc. Don’t expect too much from the get-go; you might set yourself up for disappointment. Also, not everyone is cut out for finding and securing bargains… To some extent, I think it has to be in your blood… Total assessment: walk before you run…
Best wishes!

Re: Realistic goal for a new full time investor? - Posted by Darren

Posted by Darren on April 20, 2006 at 09:23:31:

You’re goal is reasonable, especially if you’re into quick flipping houses. 4-5 rebabs a month is pretty ambitious. You would need a good team to take on that much. I recommend a marketing course like Ben Innes Ker’s. The discipline and perseverance you learned in the Corp should serve you well.

keeping busy… - Posted by lukeNC

Posted by lukeNC on April 20, 2006 at 08:42:33:

You can do all these things on your own!

Start low and move up from there. I dont do any advertising. No tv ads, and no paper ads. Just direct mail to people in foreclosure, homes about to be demolished, vacant homes, etc.

I’m a volume guy…i love havings lots and lots of stuff going on at one time. Things that make money tho. I like have 25 deals going on at one time where I can make a quick $3k from each one.

My recommendation:

  1. Do flips. quick flips, selling selling selling…make quick cash and just keep building from there.

  2. stay out of debt completely, do not borrow any money from anyone ever to buy real estate. It is very possible to do this.

I closed on a short sale deal in a city 20 miles north of me on monday, made $3k. I got a $4500 check for an el cheapo land deal. I do this all the time. I’ve got two more to do next week. No partners, no debt.

Basically, I say learn from your uncle what he’s doing, then go out on your own.

Re: Realistic goal for a new full time investor? - Posted by Fun Stuff

Posted by Fun Stuff on April 20, 2006 at 05:24:26:

I have 12 settlements this month selling stuff, 2 vacant rentals, 1 major rehab and 1 minor rehab. a 1031, and about 6 potential buys. I have no partners or employees, I’m hopping and hoping everything goes to plan.

Re: is your uncle Ron LeGrand? NT - Posted by Luke Hoppel

Posted by Luke Hoppel on April 21, 2006 at 22:55:51:

???I’m not quite sure what you’re getting at here…My uncle isn’t Ron LeGrand…???

Re: That’s a plan? - Posted by Curt Dalton

Posted by Curt Dalton on April 21, 2006 at 07:37:14:

Joe,

While I agree w/ you in theory, I also think Luke has some very good points. Tried and true does work.

I also think for many folks, they might not necessarily have the vision you do to see “plays” that are outside the norm. If for some reason you fall into that category (I think I do), you go with what you’ve read about. I might not be hitting home runs like you everytime, but a solid bunch of singles and doubles works fine for me.

Just a thought.

Curt

Re: That’s a plan? - Posted by Luke Hoppel

Posted by Luke Hoppel on April 20, 2006 at 18:34:26:

Joe,
Thanks for the feedback. One thing that I disagree with and I know a lot of people say it and I know theoretically it holds true is: "This is the old, worn out, been done a million and one times approach
to buying real estate"
You mention it’s been done a million times. I think that it’s been done a milion times because it works! I have a ton of freinds doing this and makeing a killing and I don’t consider 100K a year to be a killing.
I also agree that you will generally do a lot better if you do find your niche and create market dominance.
That’s why I said “targeted” direct mail.
I agree with most stuff you said Joe, but I don’t agree with that fact that if it’s been done before, it’s no good no. It’s tried and tested and I can learn from the mistakes of others.
Thanks for the reply Joe, I do respect your opinion, I just don’t take it for the final word like so many others because you are a guru. I hope you understand the point I’m trying to make. I look at all the data and take what I think is applicable and run with it.
I’m sure you understand.
Luke

Re: Realistic goal for a new full time investor? - Posted by Joe

Posted by Joe on April 20, 2006 at 10:34:44:

Good point, 4-5 deals per month is doable. But 4-5 rehabs a month is a big task. If you are planning on managing the work yourself, it might be nearly impossible. But if you have a team of people you work with (even just another 2 assistants), you could probably manage all 4-5 at once.

Nice Job! - Posted by Natalie-VA

Posted by Natalie-VA on April 20, 2006 at 18:27:32:

My husband is my partner and we also have no employees. It’s definitely the way to go for me.

–Natalie

Re: is your uncle Ron LeGrand? NT - Posted by David Krulac

Posted by David Krulac on April 22, 2006 at 06:22:32:

Ron Legrand is from JAX and has invested in 30 houses or more in the area. And if he were your uncle, he would probably be a good mentor.

Re: That’s a plan? - Posted by Joe Kaiser

Posted by Joe Kaiser on April 22, 2006 at 03:06:20:

Curt, I’ll have to disagree with you.

I don’t believe tried and true is what you’re seeing. I bet the majority of
what we see as marketing is not effective and is being bought and paid
for by newbies who quickly find out the fallacy of this particular
approach.

I think it’s just plain dumb, frankly, because the alternatives are 1000
times better, easier, and more cost effective.

That type of marketing is simply for people who haven’t figured out
how the game is played. I know plenty of real investors who are
knocking out deal after deal, and not a one of them does anything like
this particular approach.

I also believe you, Curt, can figure out a better approach. None of this
is rocket science. You figure out where people with big problems and
big equities are likely to be hiding, and then you hunt them down.

Believe me, you and I can’t afford the chance that guy misses our ads
or signs or flyers or postcards. I’m unwillling to discover that he’s not
clever enough to figure out how to call me.

Joe

Re: That’s a plan? - Posted by TBmel

Posted by TBmel on April 21, 2006 at 05:31:45:

Luke.

I lived in Jax for 10 years or so, did a couple flips there.(Wholesales)

I want to say that, though I agree with you, Joe made me see something that I had not seen before. I will tell a quick story to illustrate.

In jax, when I was first looking to get started, 5 years ago, I thought that there was too much competition. There were anywhere from 18 to 25 ads in the classifieds, bandit signs everywhere-you name it.

In Jax its all about the Ron Legrand school of REI.(probably why Joe said that it originated from there.)

All this made it hard for a newb with limited funds doing the Ron LeGrand thing.

Not with any thoughts so sage as Joe’s, I bought his vacant house course. I did a couple of flips following his advice. (I still wasn’t smart enough to get what joe said in his post)

The second wholesale deal’s first buyer fell through, I pocketed his 500 bucks (490 profit I figured) I almost wrote off the deal. With only days to go I knew that I needed a serious buyer, so I looked in the paper for investors with houses for sale, I found that one guy had 12-15 ads in the paper at any givin time with houses for sale. This said serious to me, so I called and he bought my deal.

The moral of the story is NOT buy Joes course-though you wouldn’t go wrong.

So I started asking this guy an annoying amount of questions while we were waiting to close. When I said "Wow you plan on doing 50 to 70 deals this year alone at 15K average profit. ummm…neat…ahhhhh…so, umm. How do you ummm… I mean, your advertising budget must be huge!

When he said that he didnt advertise at all I almost fell over. He gave some examples of things he did, all leg work. Things like Networking with realtors, calling brokers asking for pocket listings, buying wholesale flips, in short he said he was “always lookin” As for a team He had one high school friend helping him manage six seperate crews. All he did was rehabs.

I also agree with you “old and worn out” also means "tried and true"but…

After reading Joe’s post my eyes are opened. Yours?

Best of luck-keep us posted.

Mel

Re: That’s a plan? - Posted by Joe Kaiser

Posted by Joe Kaiser on April 20, 2006 at 23:10:36:

Have at it.

Joe

Re: is your uncle Ron LeGrand? NT - Posted by Luke Hoppel

Posted by Luke Hoppel on April 22, 2006 at 07:30:16:

Oh I see what you are saying. My Uncle is there and he is doing quite a few deals a year so It’s not like I’m going in by myself.

Re: That’s a plan? - Posted by John08

Posted by John08 on April 23, 2006 at 24:26:48:

You said,

“You figure out where people with big problems and
big equities are likely to be hiding, and then you hunt them down.”

Does your “how to totally dominate your foreclosure marketplace” explain how you do this without the types of marketing listed above in this post. I will admit I am someone stuck in the traditional mindset of how to do things. But I am aware of that and trying to break out of it, since I believe that is a key to increasing volume. Btw, I didn’t mean buying nursing homes, I meant that is where the people have big problems and big equity (half joking though, we buy houses flyers in nursing homes and hospitals could be seen as a little shady).