5 Strategies to Get Unstuck and Start Investing Now

by | BiggerPockets.com

Purchasing your first property is exciting. It can also feel daunting, scary, intimidating, and thrilling.

You may have spent years researching how to get started investing in real estate. Or maybe you just decided last week that it’s something you want to do.

Either way, buying your first property is an important milestone to building your real estate investment portfolio.

However, some people struggle to make that first purchase. They spend years reading books, analyzing properties, and feeling that they have to know the answers to every possible situation before jumping in. Meanwhile, others are able to dive right in with less concern about what could go wrong and are willing to learn along the way.

If you are struggling to get off the sidelines, here are five tips to get you unstuck and through your first purchase.

1. Establish realistic expectations

You likely have grand visions of your future portfolio. It will be large, profitable, and produce enough cash flow to change your life and achieve financial independence. Those are great goals that are important to have in the long-run, but they can also feel overwhelmingly paralyzing in the beginning.

Focusing too narrowly on your end goal can make you believe your first purchase will define your overall success. Instead, consider your first property as your “learning property.” Going in with this mindset will help create realistic expectations about the situation.

Take the opportunity to learn throughout each phase of the process. There are some things you can only truly understand by experiencing the problem or situation.

For example, I had never heard of putting a “Revert to Owner” agreement in place for utilities before I started investing. I wouldn’t have even known to research the term! But when the issue arose, I took the necessary steps to figure it out and learn with the process.

Know that you will make mistakes and will face things you don’t understand. Don’t worry, you’ve got this. You are smart, resourceful, and surrounded by a network of people who are willing to share their knowledge.

Related: Hesitant to Invest? Hack Your Way Out of Analysis Paralysis

2. Be honest about what is making you stuck

In reality, there are hundreds of things you must know, but allow yourself the time and space to learn them as they come up. Focus on “just in time” over “just in case” learning.

Rather than pressuring yourself to learn everything, ask yourself, “What is my biggest fear that is holding me back?” By doing this, you can focus on figuring out the correct next step—the most immediate thing you must do to get unstuck.

If your answer to the fear question is, “I’m afraid I will run out of money,” take a hard look at your capital reserves or review your financial assumptions to see if your figures are too optimistic.

Or if your answer is, “I’m afraid I won’t find tenants,” look at your product strategy. Are you looking in the right neighborhoods? Are your rent assumptions realistic for the area?

Maybe you are worried about exposing your family and business to increased liability. If this is the case, take action to research investing under an LLC or talk with your insurance agent about establishing an umbrella liability policy.

Your concerns may be different, but the point is to take a true look at what is holding you back and addressing that roadblock—not distracting yourself by trying to learn less important details.

young African American male sitting in cafe with open book on table and head resting on hand thinking

3. Right-size your target purchase

Each of us has a unique financial situation that influences how we invest. If you are new to investing and are making a purchase on your own, a 100-unit apartment building may not be your best move out of the gate. However, if you are investing with an experienced partner, you could take on a larger purchase with more complexity.

Select a target property for your first purchase that matches your financial situation and experience level. For example, a single family home is a great property to learn from.

Additionally, you may want to consider a turnkey property or one that needs minimal improvements to make it rent-ready if you lack renovating skills, haven’t established relationships with many contractors, or don’t have much time to work on the project yourself.

My first purchase was a move-in-ready single family home I purchased for $98,000. This allowed me to focus on other areas of the process for my first investment as opposed to worrying about construction loans, contractors, and a renovation. Instead, I directed my efforts toward finding a property manager and getting comfortable with the process of evaluating deals and negotiating offers.

I knew that if I purchased the home and failed at any of the key steps, the worst case scenario was that I would have to carry the house for roughly $600 each month.

This made my first purchase less scary. I knew in my financial situation, an extra $600 monthly expense would not cause financial ruin.

4. Get specific about your strategy before you expand

All too often I hear newbies say things like, “I’m going to start by wholesaling. Plus, I plan to flip one house a quarter and hope to pick up some rentals in the first year. I’m also considering investing in notes.”

The skills, processes, and systems needed for wholesaling, flipping, holding rentals, and note investing are not identical. While there are some aspects that overlap, trying to execute multiple strategies in the beginning is simply a mistake. Talk about feeling overwhelmed—not to mention scattered brained!

Jeff Bezos didn’t immediately set out to make Amazon the store “where people can come to find and discover anything they might want to buy online.” He started by selling books. That’s it. Just books.

But through his laser-focused start, he was able to set up processes and hone in on key areas of his business to support expansion over time.

We all have limited time, money, and energy. When you start, it is helpful to decide where to direct your limited resources. And once you feel you’ve mastered your first strategy, then expand.

real-estate-strategy

5. Align your strategy with your vision

If you still feel stuck, the issue could be that your vision and strategy are not aligned. Is your goal to purchase 1,000 units in three years within a particular zip code? If so, is there enough inventory to support this goal?

You may need to cast a wider net geographically. Are you trying to buy 100 BRRRR properties in an area that has few distressed homes? Maybe you are struggling to find that perfect property that will produce a large cash flow, but in your target neighborhood, sale prices are high and rent demand is low.

There is no wrong vision or goal in real estate investing. Your goals are personal to you and valid in every way. But there are strategies that are wrong for your vision.

Take an honest look at your market and consider if a misaligned strategy is the reason you are stuck.

Related: BRRRR Investing: The Ultimate Guide to the Buy-Rehab-Rent-Refinance-Repeat Strategy, Made Simple!

Key Takeaways

Adequate preparation is essential, but there is no substitute for actually investing. It is impossible to know everything about buying real estate unless you actually buy a property. You may never know all the requirements of wholesaling, for instance, unless you start wholesaling.

Believe in your abilities, the work you have done so far, and consider these five strategies:

  • Double-check your expectations for what you want out of your first purchase
  • Be honest about what is holding you back
  • Size your first purchase accordingly
  • Gain experience before expanding
  • Make sure your strategy and vision align

Now, get out there and invest!

Are you scared to jump in? What’s holding you back? 

Leave a comment below.

About Author

Carissa Swanwick

Carissa is a real estate investor focusing on buy-and-hold rental properties in Kansas City. Through her blog and social media brand, CultivateRE, she strives to give women confidence to invest in real estate. She invests with her husband as they raise two kids and both work professionally in IT. Their strategy is to build a passive income portfolio to fill the gap years between early retirement and normal retirement age. Carissa holds a degree in Construction Management from the University of Nebraska and a Masters of Business from the University of Kansas. Carissa also hosts a monthly Kansas City real estate investor meetup for women through the InvestHER Community and has been featured on the Real Estate InvestHER podcast.

20 Comments

  1. Jorge Ydlibi

    Thank you for the informative article! I gotta say #2 really struck me, gotta focus on what is holding me back and why I have not tackled my first project already, really helped with introspection and ways to move forward. I also agree to becoming specific and focusing on a niche in REI before scaling and branching out.

    • Carissa Swanwick

      I’m so glad this post connected with you. It can be so easy to distract ourselves by things we think are “important” as a way to ignore the things that are really holding us back. But once we really get to the sticking point, it can be such a relief to move past the real issue.

  2. Jerry Maze

    Excellent piece! My two biggest takeaways were 1) Selecting a property on my 1st transaction that matches my financial situation and experience level and 2) Master your 1st strategy and then expand while keeping in mind the strategy must align with your vision.

    I really need to heed to that perspective… Thanks!

    • Carissa Swanwick

      Great plan. Sometimes our eyes are bigger than our wallet. Right sizing is so important to getting started. We all have so many things we want to accomplish, it can be a challenge organizing our plans into a methodical path to growth. Good luck!

  3. Daniel Letts

    Great helpful guidelines. I have experience in building from 10 years ago and are restarting investing. Not sure to buy a BRRR building or build a duplex. I need to focus on one or the other for now .
    Thanks for the tips
    Dan Letts

    • Carissa Swanwick

      Focus is important, but I also believe it is good to keep your eyes and ears open to what is going on around you. Sometimes your next best opportunity will come from the place and direction you didn’t expect. I hope your re-entry into REI is a great success!

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