The FORT Podcast: Executing Your First Real Estate Deal
How would you go about doing your first real estate deal with no experience and no capital? On this episode, Chris answers that question as he walks through the process of executing your first deal. He explains why you need to have immense knowledge of your market, understanding how to approach banks, the process of raising capital, and more.
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(00:57) – Pick an Asset Class and a Market
The FORT Podcast RE #93: How to get your first job in Real Estate
(02:24) – Get Your Real Estate License
(04:08) – Borrowing From a Bank (FHA Loan)
(07:54) – Get to Know Your Market
(10:01) – Learn How to Underwrite a Property
(16:48) – Raising Money
The FORT Podcast RE #81: How to Underwrite
(20:39) – Setting Terms with Investors
(21:26) – Understanding What a ‘Good Deal’ Looks Like
(23:31) – Cold-Calling Properties & Talking to Brokers
(25:08) – Finding Sub-Contractors
(27:37) – After You Get a Property Under Contract
(29:02) – Property Management
(32:18) – More on FHA Loans & Chris’ First Deal
(33:41) – Wrap Up
Episode Summary
Chris begins by emphasizing the paramount significance of choosing a specific market and asset type for investment, articulating that the decision holds substantive weight in determining the trajectory of an investor’s journey in the real estate realm. His words underscore the necessity of specificity and in-depth understanding, advocating for a comprehensive knowledge of the chosen market and asset, which entails being acquainted with every street, business, and property, and understanding the dynamics that influence property values within the chosen locale.
Navigating through the dialogue, a prominent theme that emerged was the importance of establishing robust relationships within the banking sector, particularly with local banks that possess a firm understanding of the chosen market. The discourse underscores the pivotal role these relationships play in facilitating loans for new investors, offering a nuanced look at the challenges and strategies related to navigating financial pathways in real estate investment.
The conversation further delves into the challenges and strategies related to property and market understanding, providing listeners with a rich narrative that explores the various facets and nuances of real estate investment. It throws light on the importance of understanding sub-markets, and the intrinsic value that lies in recognizing and capitalizing on investment opportunities through a profound understanding of local businesses and properties, and market dynamics.
Offering a glimpse into his own journey, Chris illustrates how understanding the intricacies of a market, discerning the elements that influence property values, and effectively leveraging this knowledge can lead to identifying and capitalizing on viable investment opportunities. He elucidates how his journey, through meticulously understanding various aspects like walkability and property value determinants in proximity to educational institutions, provided him with invaluable insights and shaped his investment strategies and decisions.
As the narrative progresses, Chris sheds light on the practical aspects of dealing with maintenance issues, emphasizing the significance of building relationships with contractors and creating a network of subcontractors for future projects. He shares practical strategies for connecting with contractors, including visiting ongoing projects and meeting crews at hardware stores, demonstrating a pragmatic approach to handling the operational aspects of real estate management.
A salient point of discussion, that emerges in the latter part of the dialogue, revolves around the self-management of properties. Chris articulates the irreplaceable value of hands-on experience, advocating for new investors, especially those starting with a few units in a familiar market, to manage properties personally. This, he suggests, not only provides invaluable practical experience but also equips investors with a comprehensive understanding of property management, tenant relations, and other operational aspects.
The FORT with Chris Powers is produced by Straight Up Podcasts