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Jumping into the investment market can be daunting, especially for new investors. This can be especially true when choosing an in which to invest in the Sacramento area. Our guest today is Dan Hines, Regional Director with Mynd in Sacramento. Today we will be discussing the best strategy for an investor to get started and how to position themselves for sustained success.
Steve Rozenberg: Hey everyone, my name is Steve Rozenberg with Mynd Property Management and I’m joined today with Dan Hines, who is the Regional Director for Sacramento at Mynd Property Management. Dan, thank you for joining us today. I appreciate it.
Dan Hines: Yeah, thanks for having me here.
Steve Rozenberg: So what I want to talk about today is, how would you suggest a new investor get involved in real estate in the Sacramento area? Now, for people that don’t know, and we talked about this in other videos, Sacramento is, I don’t want to say it’s a sleepy town, but it’s an offshoot from the Bay Area, which has some pluses. It’s got a lot of stability from the government-industry. The capital is there, as well as a lot of inflow from the Bay Area. People that are leaving there because it’s too expensive so the prices are stable. It’s definitely got a lower price point than the Bay Area. So that makes it definitely appealing for investors. But if I’m new and I just want to get started, Dan, what advice would you give me?
Dan Hines: Yeah, so there was another video that you and I did where I went a little deeper on why I think Sacramento’s great and why I love it and why it’s a really interesting time in the growth. I absolutely do not support the sleepy comment about the city of Sacramento.
Steve Rozenberg: I said it was considered a sleepy town, but yeah, I know.
Dan Hines: Just speak my piece, right? First thing to do, build a team, right. Find a broker that knows the area very well, that you think you can work with and that you trust. That broker will oftentimes have relationships with people in the mortgage industry. They’ll have inspectors, they can help you build a team and it can go vice versa. You could work with the mortgage broker first, understand how to get qualified, understand some economics and they can refer you to a broker.
There are different ways to piece that together. But the most important thing is to have someone representing you that can help you find a property, that understands values, understands areas, submarkets. Finding the person that can help you procure financing and understanding how much property you can afford, what’s the right amount, and then those people should be able to help you figure out is there any deferred maintenance, are there any repairs, immediate costs that I should be prepared to endure once I close? Number one above everything else, build a team. From there you’ll start organically getting to know the area.
What market do you want to be in? What’s a reasonable rent expectation for certain areas. Those things will all come secondary. And then it’s really about understanding what your goals are, right? Is there a certain amount of cashflow that should be the target that makes sense? What’s your purpose for purchasing this property? Is it longterm appreciation, is it, that’s a whole another conversation. But a good team should be able to help you figure those things out also.
Steve Rozenberg: Yeah. It’s funny because I always tell people very much what you said. And you said it very well. I always tell people they are your team. When you’re getting, whether it’s a mortgage broker and a realtor and title company, all these people should be on your side. It’s not, I don’t think of it as, “Hey, you work for me.” It should be, “Hey Dan, what do you think on this property? Should I move forward or should I not?” And then to me, you would test me and ask me questions. “Well Steve, does this align with your goals? Is this in line with what you can afford? What do you want for rent? This is what this is.” So again, it’s part of your team is to help you, encourage you, but also keep your bumpers on so that you don’t go off the rails and all of a sudden you buy this property that you’re like, “Oh my God, I’m losing my money and I’d never could afford it.”
And you’re like, “Yeah, I could’ve told you that.” But if you’re on the team, and that’s, and again, it’s so important having that right team is the make or break. And also I would say even more importantly would be setting your goals and making sure you understand where your destination is and how Sacramento and how these properties in Sacramento fit into your strategy to reach your goals. And what I tell people is when you’re an investor, you’re the CEO of your business and your team is the operating system and you as the CEO need to be able to let them know where you see the vision of your company going. And they’re there as a supporting role. The last thing you should do is ask someone what should I buy? Because they’re going to look at it from their perspective of what they think is a good property.
They may not even know if those goals align with your goals. And so it’s like you said, the team is so important, but knowing what your goals are and taking the time to educate yourself on what you want and is it realistic and what is the strategy I think is so, so vital. So that is great information. I got to tell you, I wish more people would be like you and give that information as opposed to some of the other things that I’ve heard out there, which is not as team oriented and I just think it’s vital for that.
Dan Hines: Yeah. You’ll see people that purchase an investment property because it’s close to a particular school and they heard something good about it and it felt right. They like, they drove by it and they love that it reminded them of something from their childhood, and the whole point is that you need to know the nuts and bolts of why this deal, why this investments going to-
Steve Rozenberg: The numbers. Yeah. The numbers will tell you whether it’s a good deal or not, not the emotions or the school or anything else. The numbers dictate the deal.
Dan Hines: And if you’re not an experienced investor, you don’t know those things, you don’t understand those models, the team will help you do that.
Steve Rozenberg: Absolutely.
Dan Hines: If you don’t know what realistic rents should be in a particular area or what vacancy rate you should account for, a good team can help you figure that out. Good… the property manager, the local representative, it’s all in the team.
Steve Rozenberg: Yeah. Yeah. And if they can’t give you that information, then you may have the wrong team. And that’s why I always, we said it earlier, you trust but verify. And again, you’ve got to make sure that you and I both know many people that have bought great deals and went bankrupt. So it’s not the deal, it’s the business that gets that deal to give you the return and you’re making sure that it’s part of your goal. And that’s why, I know you guys up there in Sacramento and your connections to everybody, it’s great.
I mean it’s investing is a team concept. It’s not a singular sport. It’s like trying to play football on your own against another team. It’s just not going to work. And so that’s why I love talking to you about this because it’s a passion of mine to understand the team concept and let other people know that you can buy stuff anywhere as long as it’s in your strategy that’s getting you to the goal.
The team is the one who’s going to carry that way. And so again, if you want to know and you want to talk to Dan or you want to join our Facebook group, this is what this is all about in my opinion. It’s having these conversations. It’s understanding, it’s educating yourself. I always say, “mentally sharpen your ax before you take that swing.” Because once you take that swing and that money goes hot and you own a property and you find out it was the wrong property, it’s not as easy to untangle that mess, as Dan and I know. As opposed to not buying it and buying something correct. Do you agree Dan?
Dan Hines: Absolutely.
Steve Rozenberg: Ah boy. Good information, man. Good information. Well folks, if you want to talk to Dan, he’s an expert in the Sacramento area. Dan, how do they get ahold of you?
Dan Hines: Yeah, go to our website. It’s Mynd.co. We have an owner page there. Lots of resources on all of our markets including the Sacramento market and contact info is there as well.
Steve Rozenberg: Awesome. And if you want to get ahold of us, you can find us on Facebook. When I say us, Mynd as well, but we have a Facebook group. It’s called the Mastermynd Real Estate Investment Club. Join the club. It’s free to join. We don’t sell anything. We are there as investors. There’s a lot of investors on there, new, experienced, old and young, doesn’t matter. But we’re there educating, we’re talking, we’re engaging. You’ll be able to talk to me and other people and learn how to break down deals, how to assess deals and how to buy deals. So this is Steve and Dan. I want to thank everyone for watching and we’ll talk to you guys later. Bye-bye.
Dan Hines: Thanks guys.
There are many things to understand and remember when choosing to invest in real estate. But this does not mean an investor has to know or remember it all, themselves. Building a team is a crucial first step in the investment process. One can start by finding a mortgage broker who knows the area and can help in finding the right property for the investor. While a property may seem right to an investor, having an impartial voice with whom one can discuss such decisions can help weed through the almost-perfect properties and position an investor for sustained success well into the future.