Posted by Peter_MD on September 01, 2002 at 18:53:50:
Tracie-WI:
I personally think that working a 9 to 5 job and doing real estate part time at first is probably the best way to get going…my personal opinion.
I never had to do it since I already had my businesses up and running at full speed before I decided to do real estate investing. You see, I had already completed many real estate deals for my clients, family, and friends (just to be a nice guy usually to help them out of a situation). However, I decided in July, 1995, to do this for profit. Now, I still do deals for clients, family, and friends, however, the deals for others I do as any other real estate investor. My time is extremely limited during various times of the year like tax time, however, I have others that work for me that “prime the pump” so to speak and get everything lined up and ready to close. Also, especially during tax season, my real estate attorney just handles everything and sends out checks to my businesses based on billings and does this with a POA (power of attorney). I have used the same attorney for all of my deals (he has been my attorney for my businesses since the late 1970’s) and he also is an excellent litigator who I have used and trusted without question…believe me that is saying a lot. They are out there, you just have to keep looking until you find one…just like those good RE deals. He is extremely expensive, but worth his weight in pure platinum. Pick them right (your team) and you won’t ever regret it…don’t and you will constantly find yourself looking behind you…and I know that will be an uncomfortable feeling. Your team BTW is composed of various people, namely a real estate attorney, a settlement company (if that is what you need in your state), a good CPA, a RE Agent, a really good handyman who has the time to devote to your property, an electricial, HVAC mechanic, and a plumber. Some will work out and others won’t…just keep replacing them until you find the ones you want.
The answer to your question about pre-qualifying properties is this. When you first start out, as Craig said, you want to look at each and every property that you might have a chance at. After some time you will find that approach is extremely expensive with the only real commodity you have…your time. So, as all the GURUs teach, find the motivated seller. Pre-qualification is having the motivated seller call you with pain in their voice. They need to sell and it must be now, not later, tomorrow is good but today is even better. When you have someone like that on the phone (from one of your advertisings) telling you they must relocate, are divorcing, having problems paying the mortgage because they lost their job in downsizing, etc, etc, etc…you have to be there for them.
You get the best information you can over the phone and go out and put an option on the place. When you get really good at this, you an cherry pick…example, I tell the caller that I’m not looking for tire kickers or looky loos (actually I tell them I am a straight shooter and don’t pussyfoot around). Based on the phone conversation, you will get the feel over time about certain questions to ask to really get to the root cause of their problem (pain). Now you go out there with one little document and put an offer on the property. You give them a small amount for option consideration with maybe a clause or two of inspection, title verification, and/or approval of your attorney or business partner.
Now you would go to work. As Joe Kaiser says, without doing the above, you are just wasting your time (but you need to learn at first). The seller who is not motivated may be shopping you with someone else to see if they are getting a good deal or if they could get a better deal…and that is wasting your time. Most times, however, you have to learn the hard way…but as I instruct my bird dogs, I want you to know what it is when it hits you so you can learn and be smarter next time. I tell them it is going to happen, just don’t know when it is going to happen…and it’s not fun to have wasted you time, knowledge, and energy trecking over and talking to someone and trying to sell them on any one of the creative ideas you have in your head. I remember the first time it happened to me it was like beating my head against the wall and expecting it to feel good.
Best of luck to you in your endeavors. Read everything on this wonderful board and buy some courses with the money you earned from the profits reaped with the knowledge and advice you gained from this board.
Then someday pass on your knowledge to someone new by contributing your exposure and experience and learned knowledge to the many treads on this board.
Now go out and get those sellers that have a problem you can solve and get them some pain relief…