How Investors Can Save Thousands by Following These 4 Simple Rules

The Silicon Valley Investors Club is excited to have Wendy Papasan join us for a talk about how to find a great investment opportunity. She’s the founder of Papasan Properties Group at Keller Williams, Austin TX, and she is a trusted SVIC partner.

Wendy is the principal broker for Papasan Properties Group @ Keller Williams. She has locations in Austin, TX, Dallas TX, Houston TX and Minneapolis MN. In addition to leading her real estate teams, she is the co-host of the popular podcast Empire Building. She shares her approach in finding a great investment opportunity and the right questions to ask before moving forward.

Lessons Learned

Before I became a realtor, my husband and I were approached by a real estate agent who invited us to get involved in an investment. We were promised a fantastic return. It felt too good to be true, but we trusted the realtor. Long story short, the contractor was a crook. He left the country with our money and we received a half-finished home without any additional funds to finish it. The bank loaned us $150,000 to finish the home and we sold it for a $150,000 loss. 

We do not think of this situation as a failure, but as a $150,000 investment in our financial education. One of the MANY lessons we learned was the importance of finding an ethical agent with experience working with investors. Most experienced investors are looking for agents who understand investing and are investors themselves. A competent agent can help you avoid a $150k “lesson.”  

Create Investing Criteria

Everyone who’s interested in investing, should take some time to ask themselves questions about what they want and desire in an investment. Narrowing down what you’re looking for actually makes hunting for a property easier. Some questions to ask yourself: 

  • What is prompting your decision to buy an investment property? 
  • Why is that important to you? 
  • Are you more interested in cash-flow or appreciation? 
  • What kind of return on investment do you expect? 
  • Would you be willing to fix it up or would you like it move-in ready? 
  • What are the top three things your investment needs to have? 
  • Are you comfortable investing in other areas of the country?

Related Interviews: Ryan Lundquist | Sacramento Certified Residential Appraiser 

Work with an Agent Who Understands Investing

The most important thing you need to look for when interviewing agents is to make sure you are working with an agent who is an investor! Even though they are a good residential realtor, this does not mean they understand investing. Some questions to ask to ask your prospective agent.

  • Are you an investor? 
  • What kind of investing have you done? Have you worked with multi-family? Fix and flips? Apartment complexes?
  • How long have you owned rental properties and how many properties do you own? 
  • How many investors have you worked with? Have your deals closed?
  • Do they have access to off-market or pre-MLS properties or will they just set you up on a search on their web-site and hope something great comes along?

Related Article: What Landlords Need to Know about the Covid-19 Tenant Relief Act of 2020

Look for a Fiduciary Agent

In Austin, TX (which is my market), there are more than 14,000 agents. The average agent sells 1-2 homes/year! Would you hire a heart surgeon who only did surgery once every 6 months? While real estate sales obviously aren’t life or death, for most people their investment is their largest asset and a wrong move could bankrupt you. Ask yourself these questions:

  • Is real estate your full-time job?
  • Can your agent do more than open a door for you? 
  • Will your agent evaluate a deal for you using a pro forma? 
  • Are they a good negotiator?
  • Will they help you understand “the numbers”
  • Are they ethical and do they have your best interests at heart? 
  • Do they understand different areas of town and what the investments possibilities are in each area? 
  • Are they a local economist who happens to specialize in real estate?

Find Investment Pros Via the SVIC Referral Generator

Find a Realtor Who has a Great “Team”

Most agents are solo agents, but that doesn’t mean they can’t have a great team around them. Look for agents who have a seamless network of vendors and partners. Ask your realtor if they can connect you with: 

  • Lenders and mortgage brokers that are familiar with investors. Different brokers have different products that may include construction loans, loans where you can roll in remodeling costs, etc. 
  • Vendors who can help with remodeling and repairs. This would include contractors, plumbers, electricians, HV/AC repair, interior designers, etc.
  • Are they connected to an investor network? For example, do they have access to wholesalers who send them off-market deals? Do they regularly meet with other investors to stay relevant. 
  • Perhaps most importantly if you are investing out of state, do they have several vetted and qualified property managers that can help you begin your investing journey.

When you work with an experienced realtor who has both your best interests at heart and experience investing themselves, this can make investing safer, easier and more enjoyable. The key is to do some research before jumping in with both feet. You’ll need to do your diligence around what you’re looking for in an investment as well as what you’re looking for in a realtor.

Related Article: SVIC’s Guide to Getting Started in Real Estate Investing

 

Silicon Valley Investors Club (SVIC) is a global community of STEM professionals interested in making smarter investment and career decisions.

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4 days ago

**Group Check-In:** Looks like some STEM companies are opening their offices so folks can return early. How many of you are planning to return back to the office? And how many folks are happy with WFH/Flexible Work Arrangements and would like to continue doing so?

**We are looking for bloggers:** I started blogging back in 2013, and my only regret was that I didn't get started earlier. Blogging is a great way to crystalize your ideas, network, and open yourself up to new opportunities. If you would like to write posts for the SVIC blog([svinvestorsclub.com/blogs/](svinvestorsclub.com/blogs/)) about investing, career development, or personal development, reach out to me with your idea and if it's a fit for SVIC, I can work with you to make your blog post a reality. Ping me on Facebook or send me an email at Jordan@svinestorsclub.com if you're interested.

**New SVIC Content:** Five Great Blog Posts at Svinvestorsclub.com
1. My good friend and former colleague at Google, Karen Tsai Paone, wrote an excellent piece on how busy working moms can get started investing in real estate. The piece is fantastic and I highly recommend everyone reads it: svinvestorsclub.com/blog/busy-working-mom-edition-real-estate-investing-guide/ . She also has a blog with the most punny and awesome name www.MOMentswithKaren.com, where she provides simple and effective methods to optimize #momlife. Karen: Good job, I'm so happy to have you write for SVIC and join us.
1. My friend Nicole Sarrate released an awesome blog post about a potential trap investors can fall into when buying foreclosures. I highly suggest you read it: [svinvestorsclub.com/blog/foreclosure-risk-review-the-right-of-redemption/](svinvestorsclub.com/blog/foreclosure-risk-review-the-right-of-redemption/) Nicole: Great job!
1. My pal Kristina Flathers wrote a great piece on how you can select the right market to invest in real estate. I have had people ask me this question quite a few times, and I highly suggest you all read this post: [svinvestorsclub.com/blog/market-strategy-while-investing-remotely/](svinvestorsclub.com/blog/market-strategy-while-investing-remotely/) Also, Kristina has started her own Airbnb Management company called Andes STR ([andstr.com/](andstr.com/)). She's currently doing market research on investors pain points with dealing with property managers and would love it if you could reach out to her to share your story. You can find her post here: [www.facebook.com/groups/2404581259568336/permalink/4605755012784272/](www.facebook.com/groups/2404581259568336/permalink/4605755012784272/) . By chatting with Kristina you'll be able to learn more about her real estate investing endeavors and share with her your property manager pain points, so you both can win.

**SVIC Member of the week and or century:**

Conor OBrien: Referred at least 100 of his STEM friends to this group and we all thank him for doing so. Thank you Connor! Be like Connor!

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Popular SVIC Questions & News Articles:

**Robert Blackburn wrote an excellent question regarding your personal cost of capital, which is something all investors should think about. Every investment has an opportunity cost of your time, and you need to weigh the cost of time against other opportunities. You can find his question here: [www.facebook.com/groups/2404581259568336/permalink/4560146770678430/](www.facebook.com/groups/2404581259568336/permalink/4560146770678430/) . Good job Robert!**
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Megs ORorke asked, "Seeking advice: What are legal structures you've set up for angel investing and the tax tradeoffs?"

[www.facebook.com/groups/2404581259568336/permalink/4598914476801659/](www.facebook.com/groups/2404581259568336/permalink/4598914476801659/). Thank you for asking the question, Megs ORorke and thank you for inviting your STEM friends to the group!

Ernesto Beltran Gomez had some questions about 1031 exchanges. Amanda Han and Mike Fuller came to the rescue. Thanks everyone! You can find her answer here: [www.facebook.com/groups/2404581259568336/permalink/4603153353044438/](www.facebook.com/groups/2404581259568336/permalink/4603153353044438/)

The rather dashing Nick DiMarcello is up 71 cents on his crypto holdings. Please praise this man here: [www.facebook.com/groups/2404581259568336/permalink/4561857147174059/](www.facebook.com/groups/2404581259568336/permalink/4561857147174059/)

Well done everyone!

**New SVIC Members:** Welcome to SVIC! Our community is dedicated to helping STEM professionals make smarter investment and career decisions. We talk about Stocks, Real Estate, Startups, Venture Capital, Private Investments, etc. Basically anything investment-related, we talk about it. Feel free to ask and answer questions and share investment news in our group. The more people that contribute to the group the richer our discussions become. So don't be shy!

Free SVIC resources (We all like free stuff, except for free grape fruit, yuck!):

You can find our website at www.Svinvestorsclub.com. It's full of great info.

Check out our SVIC library packed with books that will help you become a better investor: [svinvestorsclub.com/svic-library/](svinvestorsclub.com/svic-library/)

Review our FB group social units, which are a series of posts dedicated to a particular investment topic here: [www.facebook.com/.../24045812595.../learning_content](www.facebook.com/.../24045812595.../learning_content)

Let's welcome our new members:
Vidya Rajasekaran,
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Thanks for the re-add! Jordan Thibodeau

Great initiative! The website is full of great info, seconded.

Thanks for sharing!! These blogs are so relatable!

Been debating starting to blog... I keep being asked especially since leaving goog (and potentially big tech). I'll ping you once I'm set on it 🙂

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