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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2 days ago

Hi all! Really appreciate all the great discussion on here. Most of my experience with investing has been with real estate, stock options, and 401K so I’m learning a lot! I’m looking to open a custodial brokerage account for my niece and nephew to gift stocks for holidays, birthdays, etc. Will probably focus on index funds and/or EFTs in growth industries. I would love any input you all may have on which brokerage accounts would be best suited for this and any thoughts you may have on which industries to look into. I don’t plan on doing much trading so this will be more for long term holds. Of course, any additional advice on this is greatly appreciated as well. THANK YOU!! 🙂 ... See MoreSee Less

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When I was young, I had an aunt who worked for Merrill Lynch and advised me to buy a few utility stocks with dividend reinvestment. As a kid, it was intriguing to see the dividends and see the growth over time. As an adult, I think low cost life strategy is simplest. Why not a little of both? For the actual brokerage, they are all the same, but I might suggest you pick one that you already use for your own investing or 401k that is invested in it he index fund approach, such as Fidelity or Schwab. (Normally I would push Vanguard, but since these are kids, they might get something out of visiting a brick and mortar store.) Last point. If they are old enough to have actual jobs, why not offer to match their savings rate if the commit to put the money into a Roth IRA? If you match $1 for $1, the trick is that they get to keep 100% of their paycheck, with you putting the money into the Roth on their behalf. You can do this up to the limit of your budget (ie, up to $100 per kid). This really helps them connect the idea of saving at an early age.

Vanguard is great for "set it and forget it" investments with good long term funds. If you want an actual brokerage, most are pretty similar. I like Schwab and Ally Invest, myself

I'd suggest looking into a 529 (college fund) plan through e.g. vanguard - you can choose how your investments are structured and there are tax advantages for the recipients (if the funds are used for education related expenses)

I’m on the receiving end of the stock gifts, but my grandpa likes Fidelity for both him and me as he says it’s very easy to transfer stock to me if we are at the same brokerage.

I have set up Schwab custodial accounts for all of my nephews and neice. Every birthday/holiday I get them stocks that correspond to their gifts (e.g. I get them snowboarding lessons and Vail stock). I'm using it as a tool to eventually teach them about stock and time value of investments but having it relate to the gift to help them make a tangible connection. My oldest nephew is 10 and he's already showing interest. One thing to be aware of (or to look more into) is that custodial accounts have to be reported as assets of the child when the kids apply for college & financial aid (or at least that's my understanding).

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4 days ago

Has anyone invested in “turnkey investment properties?” Sounds almost too good to be true but would love to hear what to watch out for or if what the catch is if there are any. Ty!! ... See MoreSee Less

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First one was a dud, and I'll be lucky to walk away without the loan. Didn't do my research well and was too trigger happy to buy something. Second one was doing well with a section 8 tenant, but decided to sell it and invest in a single state rather than two to avoid the overhead. I'm currently trying out the whole BRRRR thing that's popular now. More risk, more reward...

It’s way more competitive now, and all the good turnkey operators are sold out... for the most part you would be lucky to get $100 cash flow given all the expenses and almost annual turn costs... but it’s still a property that is being paid off and appreciating (in the right market). If yuu do the BRRR yourself yuu can save a lot of $, and also spend way more time and potentially make more mistakes...

By the way, having done turnkey, group investments, renovation projects, and stock investing, feel free to DM me about my opinions on real estate investing. Besides one BRRRR that I'm doing, I'm also leaning towards more hands off syndications as an LP for several reasons (more hands off being the main one).

4 days ago

Hi all! Does anyone have experience investing in SPACs? They seem to be all the rage and my cursory research suggests that they're often quite successful with sizable pops once the target company is announced. Are there any unique risks to consider or things to think through if planning an investment in a SPAC? ... See MoreSee Less

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Most of the NAVs are $9-11 for a SPAC, so if you buy it at $16 and investors don’t like the buyout candidate, it can tank 30-50% on you. The trick is to buy when they are under $12 to lower your risk, and buy the ones where you trust the managers. Chamath seems to have a good track record.

I’ve been having good luck with SPACs these past two months. As Aaron mentioned, if the SPAC for any reason falls apart before the merger, you can still sell your shares back for at minimum the NAV of $9-11, so there’s a floor and capped risk. Second, SPACs also have warrants, which are like LEAPs that are a strike ~$1-2, but are 1-to-1 with shares instead of options contracts of hundreds of shares. They offer a levered way at investing into an SPAC company. The risk there though is if the SPAC fails to find an acquisition target or merge then they expire worthless. I’ve only been going after SPACs with a set target and definitive agreement. I came across a while back which can help you find SPACs that are at a certain stage.

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