Starting a management business

[Ellison 0]

I'm new to the lease option business, but I am very excitied about the future. I want to start a managment company in the near future. I will have to start part time because I am a full time teacher. Does anyone have any input about their business? Such as, what type of profit I should expect ? Is it extremely difficult to begin your business from home? Do people take you more serious if you approach them as a management company or as a real estate investor? Just curious. I'm not looking for get rich quick numbers just some real world examples of yearly profit. Thanks for your professional help.

[-Tony- 0]

Ellison,

 

Welcome, and if you expect the worst your never let down. Expect to put time and effort into it before you see results. As for real wold ex, lets put it this way I am not experienced enough to tell you I don't talk about that. Honk honk sorry that was my own horn.

 

I have one sandwich and two option to flip. So now I know it can de done IN MY AREA I have become more aggressive. working on 2 more sandwich.

 

me

Fist deal 5 yr lease for his mtg payment $686.

My option price is for his pay off (now it is 76k) consideration $1.00.

 

t/b

1 yr lease for $850 plus $35 for the washer and dryer he gave me= $885 their option price is 103k w/ consideration of $3,500

rent credit 30%

final price $96,440 w/ a carpet allowance down to 95k

 

profit

3500 + 2,388 (199x12) + 20k (estmd back end)= $25,888

 

flipped a ghetto house for 5k owner wanted 15-20k talked him down to 7.5k

working another flip for 2.5k owner wanted 15k talked him down to 5k

 

working 2 0theirs that should net 33k and 18-20k

 

I will market a little more for the ghetto houses for Quick cash now (with out trying I have 4 people I can wholesale to), in the past I have passed on a couple but now I know better and turn that frown up into a dollar sign.

[Ellison 0]

Did you find your first houses through direct calls or through the classifieds? On the flips, do you just contract them, then sell to an investor? Thanks for the help. How long did it take you to get your first deals?

[MichaelC 160]

Nice post, Tony. Thanks for sharing.

Ellison, some thoughts about your post.....

I will have to start part time because I am a full time teacher.

The overwhelming majority of newbs entering this business do so part time. The realities and responsibilites of our day to day lives dictate this. Most cannot up and quit a paying job while learning a new business. Truth is, done correctly, you won't ever have to work this business full time, (meaning a 9 to 5 type grind).

what type of profit I should expect ?

Ahh, the question I am asked by someone weekly. My answer is always an unsatisfying "I can't answer that." There are just too many variables involved. You're in a better position to answer that, I believe. How much do you want to earn? How hard are you willing to work to reach that goal? Etc...

Do people take you more serious if you approach them as a management company or as a real estate investor?

Homeowners are a varied lot, to say the least. It's been my experience that the word investor throws a chill on the festivities when I describe myself as such to a homeowner. Thus, I never do any more, and haven't for many years. Too many sleazy, fast talking, gold chain wearing snake oil salesman giving the Rico Suave types like us a bad rep .

[tgnite 0]

I agree with Michael, Great post Tony, appreciate you sharing your start!!

[-Tony- 0]

Did you find your first houses through direct calls or through the classifieds? On the flips, do you just contract them, then sell to an investor? Thanks for the help. How long did it take you to get your first deals?

 

tgnite,

 

MC your mother in law is at the front door. Okay now that he is hiding under the bed I can tell you this. I don't call anyone unless they call me first. Don't get me wrong I did starting out but that just got me comfortable taking to owners. I feel it was a very important step, but I no longer do it. I have a flier guy who distributes fliers for me and I use bandit signs hold on someones at my door....

 

Speaking of b-signs here is another 100 well after this post I will have to order some more it took 1 1/2 weeks to get here. All my signs are gone and someone else has theres up, arrr me thinkst we have a scoundrel. So, you want to play with the big boys, I will blanket the area with material

 

As for the flips they call me I negotiate to 50-75% of what they ask usually and hand them off to a rehabber for a quick 2.5-5k

 

 

NOTE: look at the properties before you contact the rehabber I could have made 8-10k on 1 instead of 5k. Although I didn't need to see the property when I was negotiating the price, I knew from what they said and what I know about the area the condition (you may want to drive by though).

[-Tony- 0]

As for real world example, lets put it this way I am not experienced enough to tell you I don't talk about that.

 

Ahh, the question I am asked by someone weekly. My answer is always an unsatisfying "I can't answer that." There are just too many variables involved. You're in a better position to answer that, I believe. How much do you want to earn? How hard are you willing to work to reach that goal? Etc...

 

Ahh, some day this will be my response....

[MichaelC 160]

I don't call anyone unless they call me first. Don't get me wrong I did starting out but that just got me comfortable taking to owners. I feel it was a very important step, but I no longer do it.

This guy Tony gets brillianter and brillianter every day . He's right, of course. I always emphasize to newbs the value and importance of making those cold calls. I know it sucks and I realize it is not an efficient way to find deals. However, the bigger picture lies in the experience you gain from doing so. Understanding the concerns of the typical seller, their questions, getting over the nervousness of making the calls, etc. It's all a part of your growth as a successful RE guy/gal. Eventually, you'll get to the point where the bulk of your deals, perhaps all of 'em, will come about from your marketing efforts and homeowners calling you. Until that happens, though, it makes no sense to spend dollars on marketing if you aren't comfortable speaking with sellers when they call. I mean, what do you say? You might just blow a hot prospect due to your inexperience. OK......off my soapbox.

All my signs are gone and someone else has theres up, arrr me thinkst we have a scoundrel.

Are you serious? Some SOB stole all your signs?! That's downright unacceptable and unethical. It's also illegal. He/she is stealing your property. I'd make the time to set up some surveillance and wait for the thief to show. Then I'd confront him and warn him about any such future errors in judgement.

In the meantime, if this weenie's signs are in your place, why not give him a call and introduce yourself?

[Ellison 0]

Thanks Tony and Michael for the great post. I'm continuing to work on the cold calls. The good part about that is that I use to work in cable advertising, so I am use to talking to people on the phone. Tony, Do you have a website? Just curious.

[-Tony- 0]

well "ce" called me and said they were gonna take them down but the spots they left are gone now. I thought I would just go put my sign in front of theirs . I wouldn't take theres down. But I would order another batch as soon as I finish posting cause the 100 I just got today will be gone soon.