How prepared did you feel going into your first deal?

New to Real Estate · Nixa, MO · Member since 2019 · 64 posts · 50 votes

Hey everyone, my name is Blake and I’m an engineering student based in Springfield, Mo. I’m looking into investing into my first property this year (buy-and-hold sfr) and was wondering how you all felt before doing your first deal? I’ve been reading and listening a lot and absorbing everything I can, but obviously that’s not the same as actually doing it. Did you get to a point where you felt ready, or did you just have to go for it and trust you could make it work?

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Trevor Fleck

Investor · Fort Collins, CO · Member since 2014 · 123 posts · 329 votes

@Blake Ramsey Think of it like being a student when you're researching for a paper. You look in the bibliography of an applicable book, and rent out all those books. After a while, you've found that the bibliographies you are referencing all reference books/articles that you've already examined. At that point you know you've pretty exhaustively covered the topic.

In a market, I talk to as many vendors as I can - property managers, contractors, appraisers, realtors, etc. After a while you start hearing the same names and promising neighborhoods over and over again. Same with deal analysis. If you conduct enough of them, after a while you'll KNOW when you see a good deal and be ready to pounce. Trust your numbers, trust your team, and have fun! If you either don't have the bandwidth or still feel like you're just not sure, consider a turnkey company as a way to tap into an existing, proven network while also having a mentor to provide some guardrails for your first deal. That's what I did with Rent to Retirement. Either way, the biggest thing is to pull the trigger! You'll get a great education along the way and be even better with each deal.

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Juan Campos
Dallas Tx · Member since 2021 · 112 posts · 31 votes
4y
@Cody Richard where are you finding these deals? Off market ?
1 Reply
Cody Richard
Houston, TX · Member since 2022 · 9 posts · 7 votes
4y
Originally posted by @Juan Campos:
@Cody Richard where are you finding these deals? Off market ?

The property I'm looking at has been on the market 1 day and going to the property tomorrow to inspect. It's a 70s 1x1 condo with minor renovations. Its an extremely basic deal that I wanted to use to kickoff my portfolio despite it being 1 unit when I wanted 2-5 units per acquisition. Houston just doesn't have duplex's for sale due to being so spread out. Texas in general is like that because of all the space. We don't build up high population density compared to many other states.

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Vince Abernathy
Investor · SoCal · Member since 2021 · 12 posts · 19 votes
4y
@Cody Richard Have you considered the BRRRR strategy? The strategy isn't that different from what you are doing except you would be finding properties that need some work that can help you refi and get your initial investment out. I won't considered any properties that are occupied already or there is little to no difference between the AS-IS and ARV. I plan on holding my properties as long as they are profitable and tap into the equity if ever needed or let the renter payoff my mortgage and I collect a check each month.
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Anthony KingPro Member
Investor · Charlotte, NC · Member since 2020 · 239 posts · 247 votes
4y
@Blake Ramsey You'll never be completely ready, all you can be is prepared. It's an ever-changing game and eachnsotuation is completely unique. You're dealing with people, not just an asset, which, in and of itself is completely unique. Just make sure you have a solid "core 4" that you trust and are looking out for you.
First I found an awesome realtor who put up with all of my rookie questions, mistakes, and ignorance. I found him by just inquiring on a fourplex on zillow and while I didn't buy that one, he helped me buy two duplexes and two triplexes just last year. He set me up with a few solid lenders, an awesome insurance agent, a good property manager, and a reliable contractor. Just making that first inquiry on zillow asking for a rent roll, seller disclosure and owner expenses turned out to be the push I needed to make the jump from analysis paralysis to making my first investment purchase (I already had 2 single family homes I lived in then rented out after moving). It snowballed after that and I now have 13 doors.
JUST JUMP!!!
4 Reply
Michael BlumBusiness Member
NC · Member since 2018 · 55 posts · 49 votes
4y
@Blake Ramsey
My first deal was after 1 year of listening to BP Real Estate podcasts and about 4 months of scouring the local market for a deal. I used the rental, flip, and BRRRR calculators so many times it started coming second nature to me what would work with my numbers. I actually came across the property that I eventually purchased, but initially passed it up cause I was personally scared of the work. About 2 weeks later though I came back to it cause the ROI and CoC was the best I had seen. In the end, I new even if I had to replace the HVAC and roof that I would be coming our way ahead. Honestly had some fear even up to the closing table that I had bit off more than I could chew. Turns out, once the renovations started, it was actually much easier than I thought. I'd say it'll be natural to have some doubts/concerns, but nothing ever falls into your lap. You gotta take some risk to get some reward. Wishing you the best and cannot wait to see how things go!
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Wesley B WilliamsPro Member
Rental Property Investor · Louisville, KY · Member since 2017 · 107 posts · 77 votes
4y
It was a lot of mixed emotions I felt pretty nervous but also extremely excited and almost overprepared on "book" knowledge I'd been stuck in analysis paralysis for years, so when I finally bought it was a relief for me. I was definitely underprepared on experience but I doubt if I ever buy another SFR that I learn as much from than my first deal. It was an emotional rollercoaster on the first one you really just have to do it, and find the answers as you go.
2 Reply
Keisha Rae M.
Investor · Member since 2021 · 15 posts · 7 votes
4y
@Vince Abernathy super helpful! Learning from other people’s experiences is always a HUGE help. Thanks!
2 Reply
Todor Ialamov
Real Estate Agent · Burlington MA · Member since 2018 · 114 posts · 142 votes
4y
@Blake Ramsey
You can only read books as much. Pick your market, set your numbers, trust your instincts and go to work.
Your first deal will teach you way more than all books and podcasts combined.
Good luck!
2 Reply
Lawrence BriggsPro Member
Investor · Austin, TX · Member since 2020 · 367 posts · 377 votes
4y
I was as prepared as my first day of college, LOST but very determined. I jumped in, glad that I did. First property was in 2018 and the value doubled in 2021!
Podcast Guest on Show #269
1 Reply
Halie Jones
Flipper/Rehabber · Member since 2019 · 3 posts · 6 votes
4y
I did absolutely no preparing whatsoever (and had no idea what I was getting myself into!) I decided one day I wanted to flip a house, and I jumped. My first flip did not go well, owned the property for a year before selling and made a net profit of around $15,000, still better than a loss. It was an all cash purchase and reno, so no real carrying costs other than insurance, which helped. But I jumped right back in. Purchased a second and held for two year to rent out while finishing college. After college, I sold the second and made my first nice profit. Just finished and sold my 10th flip. It was a 6 month flip. Purchase price was $42k, reno cost was $55k, sold for $185k. You learn so much from every single reno you take on. Just because one doesn't go the way you thought it would doesn't mean you will never be successful at it. I now have my contractor's license and am about to begin my first ground up construction of a spec house! Most of my houses have been total gut jobs, pulling absolutely everything out down to joists and studs, and starting over from scratch. Those are the most profitable for me. It is hard work, but definitely pays off. Location is the number one factor in determining what flips I will take on. If the area is questionable, I pass. I have purchased one occupied foreclosure at auction and had no problem getting the tenant out. You can do whatever you set your mind to!
4 Reply
Bud Gaffney
Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
4y
Not very ;)
GO FOR IT!!!!
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Marc RiceBusiness Member
Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
4y
You're never fully ready, thats why buying an owner occupant 1-4 unit property is a great way to start which eases you into the game.
[email protected]614-363-2787
Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
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Chad McMahan
Residential Real Estate Broker · Sedona, AZ · Member since 2017 · 754 posts · 504 votes
4y
Originally posted by @Blake Ramsey:
Hey everyone, my name is Blake and I’m an engineering student based in Springfield, Mo. I’m looking into investing into my first property this year (buy-and-hold sfr) and was wondering how you all felt before doing your first deal? I’ve been reading and listening a lot and absorbing everything I can, but obviously that’s not the same as actually doing it. Did you get to a point where you felt ready, or did you just have to go for it and trust you could make it work?

Hi Blake.
My first 10 investments, I felt nervous. Thankfully I had seasoned investment specialized realtors in my corner and really good mortgage brokers, so I had lots of support and clear and helpful guidance. After I purchased 10 or so, I felt less nervous and emotional, and more calculated. Just get started and ask your pros lots of questions as you go.

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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
4y
I just decided to do it and didn't overthink it. Honestly, I looked at all the people who owned rentals and determined, most of them were not smarter or more driven then me. Based on their success, I was confident I could succeed. It really depends on what you are willing to do. It is not just mailbox money, so if you are lazy or emotionally fragile, you could have a tough time. People say anyone can do it, which is true, but not everyone is willing to do what it takes.
4 Reply
Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
4y
For me it was like buying a used car. I knew the make, model, mile and year and price range I wanted. Then I had to find it.

I was very specific. I had put ghost ads in the paper (LOL) to gauge renter interest for exactly what I wanted. I knew a 5 bedroom sfr with a yard for dogs would rent for 30% more than a 3 bed without pets without much price difference. People with pets were way undereserved. From 2002-4 I purchased several 5 bedroom houses.

I was still nervous but had confidence. Nail down your criteria and neighborhoods and hyper focus on what the renter or guest market needs.
3 Reply
Cody Cross
Realtor · Lake Charles, LA · Member since 2019 · 39 posts · 25 votes
4y
@Blake Ramsey if you have strong cash reserves, the area is a great location and you’ve done your due diligence roll with it
1 Reply
Ray Riley
New to Real Estate · Malvern, PA · Member since 2020 · 8 posts · 6 votes
4y
I'm in your shoes now. I'm doing my homework and going through the process. I'm reading a ton, listening to other investors share their stories, and researching on my own. I am in no hurry to make something work. Once I have all my ducks in a row (financing.. team.. etc). Then I'll be ready to start looking at deals. My goal is to have an offer in by April. Always be smart and methodical. Trust the math and keep your feelings off the table. There is plenty of money out here for all of us.
1 Reply
Judson Osbon
Real Estate Agent · Winter Garden, FL · Member since 2017 · 57 posts · 28 votes
4y
I felt very prepared having listened to literally every single episode of the OG podcast over a 4 year time frame. I feel like I had 4 years of analysis paralysis and shiny object syndrome leading up to the point where I felt like I couldn't learn any more just listening to the podcast and analyzing deals and I really had to just get my feet wet and jump in. We bought a duplex in a nice and growing downtown area that I'm very familiar with. We got 100% funding using private money, currently making interest only payments and in the process of refinancing. Bonus, since i'm an agent I earned a commission on the deal!
2 Reply
Jon K.
Rental Property Investor · Perry Hall, MD · Member since 2016 · 588 posts · 600 votes
4y
I was unprepared, uneducated and honestly pretty anxious about the whole thing. I also had reason to believe I was going to be losing my job at the time.
2 Reply
Seth CiminilloPro Member
Realtor · Lima, OH · Member since 2019 · 22 posts · 15 votes
4y
Hey Blake,
As with many people, sometimes that first deal is a big hurdle. I know for me I consumed a ton of content, podcasts, books, and looked at quite of few properties before buying my first deal. I STILL didn't feel completely ready. If there is one thing that I learned from Bigger Pockets - just getting started, and buying that first deal, is so important. It is easy to get caught in analysis paralysis and just wait for that "perfect" deal to show up. The experience and confidence you get after you finally get your first deal under your belt is huge for your real estate journey! Even if the deal turns out to just a "good" or "ok" deal instead of a "great" deal - the important thing is that you took the big step and did something. Good luck with your future endeavors/investments - you are going to do great!
[email protected]419-302-2159
2 Reply
Juan Campos
Dallas Tx · Member since 2021 · 112 posts · 31 votes
4y
@Vince Abernathy
I'll be following your journey close
Let me know how this deal goes!
When will it be ready to rent out ?
1 Reply
Juan Campos
Dallas Tx · Member since 2021 · 112 posts · 31 votes
4y
@Halie Jones
Wow very inspirational def look forward to doing some contracting work in the future !
What market are you located in ?
2 Reply
Axel MeierhoeferPro Member
Rental Property Investor · Escondido, CA · Member since 2017 · 684 posts · 550 votes
4y
@Blake Ramsey I am originally from Germany and have often marveled about the pioneering spirit my American friends and a lot of people on BP have. For myself, what has worked well and keeps working well is the learning approach that's applied for all traits in Germany to this day. Here is the sequence:
1. You get fascinated by a topic and decide you want to spend a considerable amount of time exploring it.
2. You start researching and reading about it (similar to what was described in this thread for a student research project).
3. You decide you want to be an apprentice who learns in theory and practice from a master/expert/mentor.
4. You keep learning and graduate from apprentice level to journeyman level (in German "Geselle"). You have learned a lot and gained expertise so you can show some of what you have done to others.
5. You graduate from Journeyman level to master/expert/coach level. Your former master has become a strategic advisor and confidant and you can now help others who post on BP: Hey everyone, my name is Blake and I’m an engineering student based in Springfield, Mo. I’m looking into investing in my first property this year (buy-and-hold sfr).

As others have pointed out, there is a big difference in investing locally versus 'Out-of-State', which is what I do and mentor others to do. You already decided on "SFR buy and hold". Now you need to determine if you want to do that locally or OOS and then find someone who teaches exactly that strategy and helps you to achieve your goals.
I do that for folks who contact me and we determine after a 1x1 conversation if the strategy and goals align.
3 Reply
Halie Jones
Flipper/Rehabber · Member since 2019 · 3 posts · 6 votes
4y
@Juan Campos
I am in Georgia about an hour south of Atlanta. The market is booming here, and fixer-uppers are under contract the day they hit the market. I snagged the last one sight unseen the day it went on the market, but the prices are going higher and higher. That's one of the reasons I decided to start building. I just purchased a lake lot for half the price the neighboring lot sold for 6 months ago, so we will see how building goes!
2 Reply
Vince Abernathy
Investor · SoCal · Member since 2021 · 12 posts · 19 votes
4y
@Juan Campos I chose the property management company today. They checked all the boxes I needed and were very responsive with all my calls and questions. The deal closes on the 9th and I will have them pickup the keys. They will get the utilities going and they said they could have a bid to me for the work needed within 48 hours. Depending on their schedule, I think it could be ready by the beginning of March. Once I know the cost of repairs, I will officially start the refi process and hopefully have the appraiser out shortly after the repairs are completed, but before a tenant ever moves in.
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