great post Joshua. I purchased two rental properties before I owned my first home and to be honest I didn't know a lot about what I was doing. I used my best judgement, heeded some advice from friends but the biggest hurdle was getting past the fear of "what if". I would say those two properties were not great deals but they were good ones and by owning them it has provided me with a wealth of knowledge, experience and courage to keep moving forward!
Already on it haha! You have no idea how often BP forums have come to save my sanity on these boring days at work when I feel my productivity has hit the wall as there is nothing to do.
I really need to network more outside of work with my loca REI clubs and attempt wholesaling until I can really get down to my goal of buy-holds.
Thanks! @Joshua D. I've just completed my analysis paralysis which has lasted what it seems like forever, I'm looking forward to reading these articles to serve as a reminder to not go back. Whatever we are thinking, doing always prevails!
Looking back to my beginning investing days, I can remember Carlton Sheets' No Money Down System having a section that dealt with this topic. Great articles and advice.
great post Joshua. I purchased two rental properties before I owned my first home and to be honest I didn't know a lot about what I was doing. I used my best judgement, heeded some advice from friends but the biggest hurdle was getting past the fear of "what if". I would say those two properties were not great deals but they were good ones and by owning them it has provided me with a wealth of knowledge, experience and courage to keep moving forward!
I agree. However the more you know the better off you are as it cuts down on the friction in any deal. Thats includes Real estate law, finance, closing and all the methods of real estate investing. However closing deals is really important. Once that is out of the way your on your way. You never stop learning in this business NO TWO DEALS ARE ALIKE very rare to find that. They all have variations. So if your in this your going to find out every deal has its problems. Nothing like experience. Actions are better than words I agree.
Joshua, i love this article, I've read through all the links you've posted and it's actually a great read, great help and a great way to pass the time too!
I "overcame" this today! My friend from the YMCA (who is one of the bigger brokers in our county) recommended a mentor for me (a month ago..)
I finally called the guy today and we absolutely hit it off. We will be partnering together on my first flip and he's very knowledgeable about putting together good buy and hold deals.. He also has his RE license.
Long story short.. If you're struggling with this, one phone call can be the difference from a positive and profitable real estate career and a career that never seems to actually start
This is mostly for the paralyzed fence-sitters out there...
Once you pull the trigger, you will learn more from your first deal than you will from all the years you spent analyzing up to that point. I promise you. If I could go back and do anything over it would be to start earlier, and not spend the years "learning" about REI, buying the endless books, etc... Try to find a good mentor, and by mentor, I mean like an agent who is also an investor, would be a good person to work with. They want to help you buy homes, but they will also have a ton of useful advice. Or, find a reputable PM company to work with.
I personally started with an extremely low investment mobile home in a pretty bad area. Cost me $2000. I learned a lot (especially about how I don't like investing in bad areas:) and probably broke even on that, or if I lost money, it was a small amount, and totally worth all the lessons I learned.
Second property, was a very cheap HUD home, that we rehabbed ourselves (with no experience), and managed ourselves. We made money on it over the course of the two years we rented it and sold for more than we paid. Overall, we made money, learned a LOT MORE lessons than the first deal.
I now optimize my REI for minimizing effort and involvement on my part. I work on finding the deals with my agent, and figuring out what will make sense, once the property is purchased, and the rehabs (if any) are done. At that point, I hand it off to management, because I learned on the second deal that I don't have any interest in "being a landlord". Just a real estate investor. I happily pay 10% of my rents for someone else to deal with all the BS after I own the place. We started over from scratch once we relocated to the midwest, and I'm finishing up my first year of REI since moving here. My baseline goal was one property per year, with a stretch goal of 2+ per year, cash flowing SFR. We are about to close on #2 for the year.
Have some goals, and a plan, know yourself and what you like to do, and what you don't like to do, and optimize for it, IMO. You won't catch me rehabbing or self-managing again. I just don't have the desire to do it. Maybe if I quit my day job someday and have tons of time and need something to do, but even then, I doubt it. But what you will catch me doing is scouting the MLS, analyzing numbers, looking for good deals. I am a number guy and I love doing that. I look at the MLS for fun. REI is fun for me because now I do the parts I like, and I pay someone else to do the other parts. Long term, it should be very lucrative because I'll wake up one day with a bunch of paid off houses.
Appreciated man! I am starting in Lewiston/auburn area in Maine and I have been listening to the bigger pockets podcast read the books and attend some webinars and I am telling you that I understood a lot of stuff that I wouldn't know without this great website! Keep up the magnificent work👍