How to get my real estate investment company running quickly

Chapter 1: Getting Started!

 

How to get your real estate investment company setup and running quickly.  In 7 days or less!

Here is the simplest best way to set up your real estate investment business.  This is not the best combination for every state, so it’s up to you to do some research, hire a coach, and have a local real estate attorney and or real estate CPA review this plan.  This is basically what I do, except that I validate it with local Real estate attorneys and/or real estate focused CPAs before I do it.  If you have questions, call me up, read my books and or blogs and don’t be afraid to ask questions.

This guide applies most directly to new investors to help them avoid many mistakes that we make while learning the business. If you already have some properties applying these steps will help improve your efficiency just apply the steps that make sense.  This process is mostly for people that want to hold on to the properties for a little while and rent them out.  As you know, if you hold the property for a while you develop assets rather than getting hit with capital gain taxes.

This fast real estate start up guide skips some of the business and marketing planning and gives you a basic but good plan to get you going.  If you want to get a more detailed plan, check out our comprehensive guides or our book on hands free landlording for Millions.  Every topic here is covered in our books and or blogs, so check them out if you want more details.  Each sentence here represents one or two chapters of information compressed to the bare minimum so that you can start making money fast!

This guide is not for the person that is trying to figure out if they want to become an investor.  This guide is for you that are ready to take action and become successful!

There are 3 key parts of business mixed into the following steps:

  1. Becoming bankable. We are setting you up to get funding and simplify your life for getting loans, hard money, and even private capital as cheaply and quickly as possible.

  2. Asset protection.  Set yourself up for success and protect yourself from frivolous lawsuits.

  3. Setting up your business systems and positioning you to be efficient and effective real estate investors.

Try to do these steps as quickly as possible, It can be done in a day, but try to have it done no more than in a week.

  1. Choose the state that you want to buy real estate in.

  2. Open two LLC’s.  Go to the Secretary of State in the state that you want to buy properties in.  This this yourself to save a ton of money! (Note: If you are going to Flip properties only, just open one Entity.  Check out the blog on this topic for more details, but if you are moving quickly you can open an LLC for now, and later open a better entity).

    1. First LLC is your Operating LLC.

      1. Call it something other than your personal name and do not include any real estate terms (or terms that imply a professional certification such as Accountant, CPA, Bank,  ect).

      2. Something like “<Local city> Super management LLC”.

      3. Do not waste too much time coming up with a name.

    2. Second LLC is the LLC (or other entity) that you use to hold your properties in.

      1. Call it anything you want.  Ie, “Things that rhyme with Dime”.

      2. When you buy your first few properties, put them into this LLC.

      3. If you have different sets of partners invested in different properties, give them their own LLC.

      4. Make the First LLC (your operating LLC) a 1% owner.

    3. Heads Up/Bonus: Don’t register your entity and EIN before you read the first Newsletter.  If you registered for the newsletter, in the first letter there is a special discussion on tips and tricks with your entities that will help you later when you are raising funds, don’t miss that as it will help you raise lots and lots of money (I can only fit in so much detail on this blog without it becoming a book).

  3. Set up your operating agreement.  Have all members sign and agree to the terms

    1. Either buy one or modify the one you got from the newsletter at www.makeRealEstateInvestingSimple.com (has lots of forms and documents to help get you up fast).  Use them as a base, but make them your own or use one from a service that helps you setup your entity.

  4. Go to the IRS and get an EIN for each LLC (or Entity) that you have.

  5. Go to myfico.com and get your FICO Score. I recommend to do the trail score watch membership with the discount link I provided.

    1. Print them, review them and save them.

    2. Look over them for 5 minutes to see what is bringing down your score. Later we will work over improving our secret weapon, our credit score! But it can take time, so start right now!

  6. Go to the bank Open up Business accounts. Find a nice bank that gives free business accounts and has branches that are accessible to tenants and contractors in the areas that you are investing in.

    1. For the Second LLC that is holding the assets Open 1 account:

      1. Call it “<MY Asset LLC> operating account” – That’s enough thinking for this one.

    2. For the first LLC that is the [Property] Management company open the following accounts:

      1. “<Operating LLC> operating account”

      2. 2 + the number of units you plan to buy in the first 3 months.  Name them “Unit 1”, “Unit 2”….

        1. I have all my tenants pay rent to their own account and they deposit their funds right with the bank.  This way they are not bothering me and they get a receipt from the bank.

        2. This gives your a couple extra accounts incase you have one that you need to evict and leave them with a way to pay what they owe and to use for collections for that tenant.

      3. “Deposits” – try to make this interest bearing, but if not, it’s ok.

      4. “<MY asset LLC> customer” – For each asset company you manage, have a “Customer account for it.  Remember, that the Management company LLC is treating the other LLC’s like customers.  This is for asset protection reasons that are too complex for a start up guide.  The newsletters that you signed up for earlier will explain it in greater detail.

      5. Optional.  If you are very detail oriented and have the goal of bank financing do the following>

        1. For each building, Open an account.

          1. IE. 123 Main st (even if it is a multi Unit building), 124 Main St…

          2. Pay all builds for that property from this account.

            1. Use Web Bill pay and auto pay options

          3. Set up the Customer account as the overdraft account.

    3. Pre fill out Deposit slips with the account numbers and basic details for your tenants.  Fill out 12 slips for each unit, you can address them now, or later, but put on the account numbers and other required information.

  7. Set Up your phone system.  I recommend 3 options: Google Voice, PBNext, Skype.  I use a combination of all 3 in my business with PBNext at the center.

    1. Go to PBNext.com

      1. Register for the service (around $29.95 per month).

      2. Set it up so that you get email notifications as soon as someone leaves a message (it’s easy, call their support if you need help, also there is a video from the newsletters that you have signed up for that should also help and gives you tips and tricks to make this easier).

      3. Consider setting up a user for your maintenance support guy so that he gets the messages for support calls (this is also easier than it sounds, call their support if you need help or watch the video from the newsletter).

      4. Set up the following extensions:

        1. 311 – Maintenance Requests

          1. Set the voice message for them to leave you name, phone number and a detailed message.

            1. “You have reached <Management LLC> maintenance support line. Please leave your name, number and a detailed explanation of your maintenance request.  Thank you and we will contact you back as soon as possible”.

        2. 0 & 1, default – General inquiries

          1. Hello, you have reached <your name> <Role – Manager, President..> at <Management LLC>, I’m sorry I’ve missed your call.  Please leave your name, number, best time to call you back and a short message so I can know how to best serve your needs. Our Fax Number is <xxx-xxx-xxxx> and my email is <email.com>.  Thank you and have a great day.”

          2. Note: PBNext gives you a free fax number

  8. Create your branding logo

    1. Either brainstorm this yourself or go to Fiverr.com and pay someone $5 to help you out.  Sometimes they will require a few extra $$ if you want special options so check out their “extra gigs” to see what they provide. Do a search for “design logo” or “design branding”.

  9. Create your lease.

    1. Either go buy one, google it, or modify the free one that you got from signing up with the newsletters.

    2. Set it up with your Management Companies Address, name and details.

  10. Order your business cards, I recommend vistaprint.com (use the paid ones, don’t let them put their name on the back of your card).  (every time you get a businesss card, make sure you write on it where you met the person and something personal about them & what you talked about).

  11. Create a travel Binder with the following:

    1. Rental application

    2. Lease agreement

    3. Purchase offer agreement

    4. Warranty Deed, quitclaim deed (get these drafted for you locally, call your title company for help – should be cheap or free)

    5. Blank checks from your management company

    6. W9’s for your contractors and subs.

    7. Contact list (with HVAC, electrician, handyman, lawn service person, rehaber(s), bank business account manager, title company, home depot, Lowes, local glass and service companies, local police stations, code enforcement office/agents, Real estate CPA, Real estate tax attorney, eviction and collection attorney).

    8. Tenant names, addresses, contact information

    9. Business cards.

    10. Calculator

    11. Call log

    12. Optional: Copy of each tenant’s lease (Better to have these scanned an on your phone or dropbox account).

    13. Pens

  12. Build your power team:

    1. Title company: I use First American Title (reference Phil Cutting).  Check out some of the local guys also, they should have good access, be able to give you leads, and either have or be a real estate tax attorney (you will probably use a different one for your contracts and business, but they should be able to answer questions and understand investors).

    2. 24×7 emergency services

      1. Have a night and day HVAC and Plumber.

    3. Real estate attorney.  Ask around and find the real estate attorney that meets your needs.

    4. Bookkeeper/CPA/Tax attorney.  Call up and find a good affordable tax preparer.  you can do it yourself or outsource it.

      1. If you signed up for the newsletters you will get good tips on tax prep.

      2. If you want to outsource some of it, check out www.lionBookkeeping.com, they also have good tips and how to’s to do it yourself using quickbooks.

    5. Realtor.  Find a good realtor.  You may need a seperate one for buying and another one for selling.  They are different skills.

    6. Handy man: this should be your go to guy for most problems that come up.  Having a good one or two of them will simplify your life and is necessary to be a hands free landlord.

  13. Go to www.ListYourSelf.net  and list your phone number for free with 411 services.

  14. Get Quickbooks

    1. Buy quickbooks pro.  You can get it pretty cheap on amazon or if you are working with a quickbooks proadvisor you might be able to get a little bit better discount.

    2. Go to LionBookkeeping.com for support and help on quickbooks

      1. These guys are quickbooks proadvisors and have been working with quickbooks for real estate investors for years.

      2. Look at these guys and see if you want them to do your bookkeeping for you.  It’ll save you a lot of time and they get discounts on quickbooks. They can also help you get started quickly.

  15. You are now ready to get into action!  It’s time to hit the ground running

    1. What, not sure what to do next? Go buy some stuff! It’s easy! Right!  It sounds easy, and it is!  Just don’t let the fear monster get in your way.  Make a plan.  The one I recommend for a six figure a year income is to every week, send out 25 pieces of marketing, to make 10 calls, 4 offers and do 2 networking events every week. This plan is scalable, but take it easy at first and focus on consistency.  At the max, double it for the first month to get into the swing of it.   If you have signed up for the newsletter you will get tips on how to make this easier and how to proceed along with examples of marketing pieces and tips and scripts for talking to people on the phone.

      1. One Tip about scripts: They are all no good in the long run.  You use them to start if you are shy or nervous or just don’t know what to say, but you have to take any script and make it yours as soon as possible.  People can recognise when you are reading from a script  So if you are using one great start, but learn it and make it yours so that the conversation flows.  Remember that your job on any conversation is to listen and ask the right questions

    2. Still not sure what to do? Don’t worry, you have options!

      1. Go to www.makeRealEstateInvestingSimple.com and check out our blogs, ask questions, and get involved.

      2. Go to our facebook page at www.facebook.com/makeRealEstateInvestingSimple and ask questions there!

      3. Been there, done that, still need more? We have some options to help.

        1. Join our Newsletter! It’s free, and gives great tips! We try to send out only two times per month, but if there is a time critical announcement, or law change that can affect a large part of our members, then I’ll put out a special announcement.

        2. Books: We have and can recommend some books to help you get going.

        3. One on one Gold  coaching.  Get us to help you out for 6 months, one on one.  Have direct access to my cell phone and email.

        4. One on one Platinum coaching.  Get all the Gold benefits plus a 3 day in person training at the investment location of your choice.

        5. Partner with me!  That’s right, have me work with you free!  Well, not really for free, but without paying me!  For a limited number of active customers I can partner with you in your business.  I do get to own part of the company for this involvement and you do have to be serious.  If you are interested, contact me with the contact form.  This isn’t something you have to do because in my books, videos and courses I give you everything I know as fast as I can test things and put out the content, but if you want to ask more personal questions, be on the cutting edge of what I’m doing or be able to utilize my resources then this might be for you.

    3. As you grow, you will need more systems.  Like an CMS, mail system, websites, facebook fan pages…  These are great, but can come a little later and should be part of your marketing plan.

  16. Go to the following sites so that you can stay informed.  All are free and give incredible valuable information without giving you spam.

    1. Go to NevieAndPhil.com and sign up for the news letter

    2. Go to makeRealEstateInvestingSimple.com and sign up for the news letter.

    3. Check out my amazon.com reading list for great resources on helping your organize your business and mindset if needed.
  17. Congratulate yourself at this point!  You just went through a lot of work. Make sure that you signed up for the newsletter to stay up on events and get information that you will not find anywhere else!  Good luck and God Bless!

    1. Now It’s time to do some planning.  Check out our blogs on:

      1. Planning your marketing strategy

      2. Planning your daily/weekly operations

        1. Phil’s Quick Business Plan: 25/10/4/2 (check it out!)

      3. Setting your milestones and goals

      4. Progress review and accountability

These are a lot of steps and they are missing a lot of details that we will get into here shortly on the blog.  It is quick and down and dirty but it is the no BS steps to getting your business up and running quickly.  One of the steps that we skipped here is to write down your goals and to make a mini business plan.  We also will talk about that as you go through our training here, but please don’t underestimate goal setting and skip it completely.  Setting good goals and going back to them has been one of the biggest keys to my success and has saved me from making many terrible choices.

There are 6 main components (or parts) of  a successful real estate investment business.  We don’t talk about them directly in the quick start guide to real estate investing very much because it’s complex and will require weeks of study and that would get in the way of making money in the first place, and that is like a crime in business!  If you are interested in these topics they are addressed more in the blogs and explicitly in the books we write.  Also they are addressed in more detail in the newsletters for you and your reading and viewing pleasure.

 

  1. Organization {House foundation}

    1. This is your entity (like an LLC),  managers, board of directors, team members and processes.  This is the base for everything to stand on.  Put your home on solid ground and watch it stand the test of time.

  2. Mission, Goals, Plans and Standard Operating Procedures {Roof, keeps you from getting rained on or blown away}

    1. Having a clear mission and goals helps keep everyone focused and on track.  This also includes having a clear plan for business and marketing that is achievable and meets your needs.

    2. Standard Operating Procedures allows you to make processes that allow you to delegate work to other people, be that your spouse, staff or outsource them.  WIthout this, you have created a job (slavery).  When you have procedures setup and written down, you can test them, and make them update them as times change.  Without them you are working in the dark.  It’s good to put these in writing if for no other reason than to make sure that what you are doing is actually intended to make you money and makes sense.

  3. Legal {Door and armor, keeps you safe from others and yourself}

    1. You need to have your assets covered and protected, your organization and business practices should cover you for most of this, and the insurance and bonds should cover the rest.  Having good attorneys and CPA’s that give you solid legal and accounting advice will help protect your business and assets long into the future and is much cheaper than having to go to court or deal with legal or ethical problems.

  4. Product development and maintenance {The kitchen, “What’s cooking?” }

    1. You need to take care of your product and develop it.  For you it is your real estate and your tenant (customer) relationships.  You have to maintain your properties in good condition if you are going to keep your tenants and not end up with large and expensive repairs, vacancies and problems from the community like code enforcement and neighbors.

  5. Systems {The mechanics of the house, your HVAC, plumbing, mail and phones}

    1. This is your computer software, accounting, phone, email and marketing systems.

  6. Accounting and Financing {Windows, what people see other than the product}

    1. In the long run, you will want to use leverage.  I recommend to use it wisely as soon as possible.  To use it wisely you have to make good choices on what is going to lose or make you money.  Many of the steps we have taken here are designed to help make you fundable.  Building your credit worthiness is a process and not something you should let happen on it’s own.  Understanding credit and having accurate accounting systems are key to getting funding, loans and being bankable.  It doesn’t matter where you are now, you will always be working on improving your bankability.

Even if many of this does not make sense right away, it will start to as you follow the plan and develop your business.  Just keep working, reading, studying and you will be able to pull away layer by layer to find that pearl, a successful business that makes you loads of money.  Have fast you develop is up to you!

 

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