{"id":2094,"date":"2023-09-07T18:08:50","date_gmt":"2023-09-08T01:08:50","guid":{"rendered":"https:\/\/www.lorallangemeier.com\/?p=2094"},"modified":"2023-09-07T18:08:50","modified_gmt":"2023-09-08T01:08:50","slug":"how-to-start-a-real-estate-investment-company","status":"publish","type":"post","link":"https:\/\/www.lorallangemeier.com\/how-to-start-a-real-estate-investment-company","title":{"rendered":"How to Start A Real Estate Investment Company."},"content":{"rendered":"

\u00a0\u00a0\u00a0\u00a0 There\u2019re so many strategies to real estate.\u00a0 You can do wholesaling; you can do a fix and flip company.\u00a0 You can do a construction company.\u00a0 What do you want to do?\u00a0 A land development company was my favorite in 2021.\u00a0 Tons of people, especially young folks that want to jump into real estate, want to do the arbitrage model.<\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0 So, essentially, arbitrage and wholesaling are similar.\u00a0 Arbitraging in Airbnb would be where you find a whole bunch of property owners that want to Airbnb or short-term retail their properties, and you can go out and find and market for the people who want to rent.\u00a0 Now, if you want just the connection, that\u2019s maybe eight to ten percent.\u00a0 If you do all the work, and become the management company of it, where you go in and you clean between the different clients that come in and out every weekend.\u00a0 One of the women I work with, she makes 22 percent, because she does it all.<\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0 You can be in the middle and not have to have the capital, you could just get started more service based.\u00a0 It\u2019s huge.\u00a0 I tell tons and tons of my younger folks, who don\u2019t have the credit or the capital, or even the experience, because you\u2019re going to get experience.<\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0 So, having a real estate company, or a real estate investment company, is not difficult, it\u2019s just different.\u00a0 And you\u2019ve got to grow into it, you\u2019ve got to start building a portfolio.\u00a0 The question is, do you want commercial, or do you want residential?\u00a0 What do you want and how do you want it to grow?<\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0 All of my students will start in single family, they\u2019ll move to Airbnb.\u00a0 Actually, some of them need to start with fixing and flipping as a starter point, or wholesaling as a starter point, which I\u2019m not a big fan of.\u00a0 I\u2019d rather see you flix and flip, get some money, get some credit.\u00a0 Go again, and then start building a portfolio, and then move up into commercial, or just go straight to commercial.\u00a0 You get more doors.\u00a0 From a four-plex to an eight-plex, to a sixteen-plex right away, and more rent.<\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0 So, what\u2019s the benefits of this?\u00a0 Well, obviously, financial freedom.\u00a0 I want to make you a millionaire, it\u2019s always my goal to make you a millionaire.\u00a0 The tax benefits of being in real estate, because of the depreciation schedules, and if you even look a loss, your ability to carry losses forward for future tax returns, is enormous.\u00a0 You can control your own investment, and you can start building a big portfolio.\u00a0 It\u2019s one of the fastest ways to grow well, and most wealthy people have real estate.<\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0 How do you start?\u00a0 Well, first of all, I would hire a coach, and I would be a great one.\u00a0 I have a whole team of real estate experts.\u00a0 I\u2019ve been a real estate millionaire since 1999.\u00a0 I love engaging in it.\u00a0 I don\u2019t do it alone.\u00a0 I do it on teams of people who do a lot of fieldwork.\u00a0 I call them field partners.\u00a0 You\u2019re going to partner with money.\u00a0 You can partner with experience.\u00a0 I would say experience is vital for you beginners.<\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0 So, you research a market.\u00a0 Where do you want to be?\u00a0 Which category, which strategy?\u00a0 There\u2019re two kinds of things when I research a market.\u00a0 Where do you want to be?\u00a0 You want to think about growing a portfolio over time.<\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0 What defines you as a real estate company is the structure.\u00a0 The tax structure you live in. Are you an LLC?\u00a0 Are you an S Corp?\u00a0 Are you a C Corp?\u00a0 When you build it all right, you\u2019re going to have one of each, if not more.\u00a0 Typically, there\u2019s a structure of 5-10 corporations and structures held in trust, that oversee it all.\u00a0 That\u2019s a real estate company, and that\u2019s a real estate investment company.\u00a0 So, that\u2019s not where you\u2019re going to start.\u00a0 You\u2019re going to start with one LLC.\u00a0 <\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0 Once you have a coach, you\u2019ve got to figure out, again, where you\u2019re going to be, the strategy you want to implement.\u00a0 So, where\u2019s your market?\u00a0 What strategy do you want to go for?\u00a0 And then, I would get a local field partner team.\u00a0 People who are really going to be partners, and I legally make them partners, because I don\u2019t want a management company that\u2019s going to be miles and miles away.\u00a0 If something happened, or they just decide to quit, guess what?\u00a0 You\u2019re getting on a plane and going across the country.\u00a0 These \u201cdone for you\u201d real estate deals, where they\u2019re going to buy the property, rehab, manage, and do it all.\u00a0 Some of them are structured illegally, they\u2019re really securities.\u00a0 They\u2019re not just a real estate deal, those are different.\u00a0 So, you really want to know what you\u2019re doing.\u00a0 So, again, get a coach, get a mentor.<\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0 Once you get a portfolio, three, four, of these properties you\u2019re going to be able to get funding.\u00a0 You\u2019ll be able to have corporate credit, and the ability to get OPM and OPC, which is other people\u2019s money and other people\u2019s credit.<\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0 How do you get funding?\u00a0 I\u2019m a huge fan of traditional finance.\u00a0 You can become a real estate professional.\u00a0 So, that means you have to put in several hours.\u00a0 I think 750 is the current requirement.\u00a0 So, 750 hours a year to become a professional, and it\u2019s going to be a huge tax advantage to you, having your real estate company.\u00a0 It\u2019s a checkbox on your tax form.\u00a0 Your CPA tax strategist should know about it.<\/strong><\/p>\n

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