Need Realtor Advice: Feeling Discouraged Before I Start
Member since 2021 · 63 posts · 37 votes
Need Realtor Advice: Feeling Discouraged Before I Start
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Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votesI would say you aren't ready if you are saying you are open to buying anywhere. You shouldn't be. You should be deciding where your money is best spent and also where it will benefit you the most. Do you want to be able to touch and see your first investment so you can learn more? You definitely have more than a chance, you just need to figure out what you want and what you can get for your money and if you want that now. Think of it this way, if you rush to get a first investment, but then find out if you just saved for another year, you could have gotten one with higher cash flow and more appreciation, would you wait?
You will most likely need to pay over asking, but you don't need cash on the side unless you are waiving appraisal.
79 Replies
- Real Estate Agent · Plano, TX · Member since 2015 · 734 posts · 511 votes4y
Quote from @Misti DelMar:
I'm buying my first investment property this summer and I've been watching everything in real estate pretty closely (through Bigger Pockets and social media)....
When I'm ready to buy this summer, I'll have 20-30k saved up, that still won't leave room for having 50-100k liquid on the side to pay over asking price, like so many people are doing.
*Do you guys (realtors?) out there think I even have a chance? I'm open to buying anywhere.
*Will realtors even want to work with me if they find out I don't have tons of cash on the side to pay over asking? How bad is it really out there?
(If crypto goes on another run, I will have a lot of $$$- but that's no guarantee)
Thanks for any honesty or encouragement. Trying to mentally prepare.
masking over asking price is a “thing” only in some markets (the hot ones obviously). If you’re really open to “anywhere” then you should do some research on other markets where the frenzy hasn’t reached yet but still have good potential for future growth. As you’ve been told above, limit your “anywhere” to markets you have actually researched and decided are good for your criteria.
As for the cash situation, the easiest way to handle it is to house-hack it. Find a 2-4 units property in a market you’d like to live in and your $20K + FHA loan for first time home buyer can get you a good size investment you can afford.
Good luck! - Flipper/Rehabber · Pensacola, FL · Member since 2015 · 220 posts · 99 votes4y
When searching for properties on the MLS, I use a filter that only shows properties that have been available for more than 14 days. This will help you from wasting time on properties that are going for multiple offers. The residential buyer that will live in the house can usually spend more money than an investor. Houses that have been on the market for more than 14 days usually are overpriced or have some repair that needs fixed. You will want to keep emotion out of it and buy according to your formula for ROI and start a relationship with a contractor. Good luck!
- Investor · San Diego, CA · Member since 2016 · 1k+ posts · 975 votes4y
@Misti DelMar 20-30k is enough to buy a rental property in many areas around the country. However, I highly recommend having some cash reserves set aside for any capital expenditures or major repairs that may pop up after you purchase the home!
To answer your question though, realtors will still want to work with you. Just make sure you chat with a lender first and get that pre-approval letter!
- 4yDaniel SmythPro MemberRental Property Investor · Rockford, IL · Member since 2019 · 471 posts · 342 votes
@Misti DelMar
About feeling discouraged:
That feeling before you take that first jump in the pool or jump off the peer into water so deep. That feeling you have before you allow that girl to see you looking at her eyes to eyes before you get that strength to tell her she looks pretty. That feeling you get when you cross a street where you know people at times loose all they have because they misjudged traffic or their ability to negotiate out of a vad situation.
Being discouraged is not something to get over, but something to learn from.
Unless there is an emergency, that requires you to jump from a fire into the water, you have the power to learn and plan.
Watching and listening to hundreds of testimonials on BP and other venues, I have been able to put my self in many like situations.
So, before you get into a boat on a trip to the islands, you do certain things, right?
You might not take all that you have, grab the wife and kids, and sell what you have just before you go on that trip with a boat you bought from some very nice people that keep telling you that they have you a deal of a lifetime. You might want to do so many things first.
Real estate is no different. This is a business of risk that has made people fortunes, and made people jump off bridges to their death, or suicide in other ways.
If you are here, you are in a good place!
While there are many ways to do real estate, pick one and investigate what is required fir success. There are plenty of check lists made by so many here, and they can help greatly to get you on your way to a firm standing.
Read "Rich Dad - Poor Dad".
This might ease your path to get into temporary debit so that you never feel you must first have the money of the king to own a castle.
Other tools and advice here also let you plan for the things that could take you off your path for a time, and how to get back on it.
Go forward young man!
While speed is best for some, and going too slow may loose that deal you really had your eye on, every property has a number that makes it a positive deal for you and your finances!
I wish you well!
- 4yDaniel SmythPro MemberRental Property Investor · Rockford, IL · Member since 2019 · 471 posts · 342 votes
@Misti DelMar
Of course my reply was done with me not knowing this post was from a woman.
Meaning, I am blaming a spell-check program for not placing the wo in front of man when I commented "young man".
Sorry Misti,
- 4yScott JohnsonBusiness MemberSpecialist · Greenville, NC · Member since 2019 · 673 posts · 408 votes
Quote from @Nate Sanow:
The short answer is YES I personally would love to work with you, and many others like me likely would, too. There is to me somewhat of a mistaken perception that all realtors want everything to be high end and luxurious. I've done a lot of business under 100k and I'm ok with that. Yes, that is going to be more C-class around here, but it is doable is my only point. Here to help anytime if you want to send a message or talk, even if just for fun and something to consider. I always say, it is an honor to me if someone even considers working with me, and that is something I never want to take for granted.
I like that. I'm the same way. Not always is the highest sale price what the client wants, especially if they're in danger of being foreclosed on. As Realtors we do what our clients believe is in their best interest after we've educated them on their options.
- Residential Real Estate Broker · Sedona, AZ · Member since 2017 · 751 posts · 504 votes4yMisti,You're not alone.
Quote from @Misti DelMar:
I'm buying my first investment property this summer and I've been watching everything in real estate pretty closely (through Bigger Pockets and social media)....
When I'm ready to buy this summer, I'll have 20-30k saved up, that still won't leave room for having 50-100k liquid on the side to pay over asking price, like so many people are doing.
*Do you guys (realtors?) out there think I even have a chance? I'm open to buying anywhere.
*Will realtors even want to work with me if they find out I don't have tons of cash on the side to pay over asking? How bad is it really out there?
(If crypto goes on another run, I will have a lot of $$$- but that's no guarantee)
Thanks for any honesty or encouragement. Trying to mentally prepare.
Many people are low on cash, but have good credit and decent+ income VS expenses/debt. That's why there are 95%-100% LTV programs out there. When cash is low, but you still qualify for financing, get a primary residence that has 1-3 rooms you can rent out and generate some cash flow. After 1-3 years, either ref or sell and you will have the cash to invest more flexibly. - Member since 2022 · 16 posts · 9 votes4y
Misti- Keep networking with those who support you and make a list of small action items every day. This will drive the conversations to get to your goal. The fire hose approach is always exhausting, just be a sprinkler and let that grass grow!
Manny T
The Big Mexican
#handimanny - Investor · Charleston, SC · Member since 2022 · 233 posts · 198 votes4y
Quote from @Misti DelMar:
Sorry guys. I probably shouldn't have posted this. I did in a moment of frustration this morning.
I saved to buy property for July 2020- but my business was completely shuttered in most of 2020 (travel & event industry) and I had to use that money to live on for the year. Now, I'm resaving money 2 years later to try again, and it just seems so impossible. I have a high-stress job and need to create other streams of income asap before I burn out and collapse in a blaze of exhaustion and defeat... that is all ;)
@Misti DelMar - This will probably come of hokey - but for me, every time I've gotten extremely focused on the outcome, exactly what I want I've been able to see the path open up before me. All the advice you've gotten about picking a market etc is all great and spot on, but taking it a level deeper and knowing exactly what you want, painting the end goal in your mind even with the intermediate steps completely unclear it will start to work out.
For example, my wife and I recently sold some property to take advantage of the hot market, but decided we were going to 1031 exchange the property. We had 45 days to identify the replacement. It would have been easy to say this market is too hot right now and its not going to work, but we got really clear on what we were looking for and the timeline and lo and behold we found the best investment to-date within the timeline and have already closed on it. I don't know how the stars aligned, but I do know we were talking to all the right people, and looking in exactly the right places and were all in the moment it hit the radar.
You've got this! You started the wheels in motion with the two years of saving, which is awesome! Good luck.
Here's one of my favorite quotes about sleeping on it! Whether you like or know Colin Powell, this couldn't be more true.
"It ain't as bad as you think. It will look better in the morning."
- Property Manager · Burlington, NC · Member since 2018 · 57 posts · 20 votes4yHey misti! I would say as a first step that you should figure out a market that you want to focus on. That way you can run numbers and know that when an opportunity comes up that its a good deal. I would say make your offers based on the numbers. If the numbers only work if you offer 5k above asking, then dont offer 15k above cuz youre afraid of missing out. opportunities are easy to come by. 15k is not.
Quote from @Misti DelMar:
I'm buying my first investment property this summer and I've been watching everything in real estate pretty closely (through Bigger Pockets and social media)....
When I'm ready to buy this summer, I'll have 20-30k saved up, that still won't leave room for having 50-100k liquid on the side to pay over asking price, like so many people are doing.
*Do you guys (realtors?) out there think I even have a chance? I'm open to buying anywhere.
*Will realtors even want to work with me if they find out I don't have tons of cash on the side to pay over asking? How bad is it really out there?
(If crypto goes on another run, I will have a lot of $$$- but that's no guarantee)
Thanks for any honesty or encouragement. Trying to mentally prepare.
As for realtors. I know a couple around here in the triad area of NC that I could connect you with that work with investors. I would say talk to them and be honest about your situation and they will be honest with you. You absolutely have a chance. The deals are out there. Just gotta keep a positive attitude and stick with what your numbers are telling you.
GOOD LUCK!! - Investor · Chicago, IL · Member since 2018 · 352 posts · 176 votes4y
@Misti DelMar
I think even in hot markets there are things that will get overlooked, if you’re willing to get into something that needs updating and TLC then I think you can find a deal. Try house hacking or even rent hacking. With this being your first deal, your primary goal should be to reduce your living expenses anyway possible. Doing so will allow you to increase your savings rate which will open up new options for you. Best of luck!
- Investor · San Diego, CA · Member since 2017 · 112 posts · 92 votes4y
@Zeona McIntyre said about using a turn-key provider. This is how I first got my feet wet with investing. It's much easier for long distance because your "team" will be already set up for you . The price is set for the purchase and you don't need your own real estate agent. It makes it easy to run the numbers and do a solid analysis before you make the purchase. You will need to get pre-approved through one of their preferred lenders and be on a waiting list. I've had good experience with Real Worth Network. https://realwealth.com/ You can talk to an investment advisor (no cost or obligation) and they can suggest different markets based on your investing goals, price point, etc. I know there are markets such as Indianapolis, Ohio, Alabama, where you could find something under $150k. Good luck!!
- Member since 2019 · 23 posts · 19 votes4y
Investment properties usually require 20% down as a minimum. You can find properties with what you have saved, but they may not be in areas with low crime, good schools, economic growth, etc. Be very careful.
Have you gotten pre-approved with a lender? If so, you know what you can afford. Look for properties that are less than that so that you can bid over if needed.
If you buy as an owner/occupied, you don't need as much down. Perhaps you could afford a multi or even a rentable accessory apartment. After a year, you can move on to the next one.
Even if it takes you awhile to get your investments started, you're still doing better than most Americans. Stick with it!
- Real Estate Broker · Portland, ME · Member since 2016 · 63 posts · 55 votes4y
Focus on your Core Four (David Greene's idea). Write up some questions to ask a realtor (ONFIRE acronym) and your property manager. The amount you have to put down can go a long way with the right people.
Run the numbers on a zillion properties and trust them when they fit the model you want. The right one will come around. It will scare you and thrill you. It still does for me.
- Member since 2021 · 63 posts · 37 votes4y
Quote from @Sam Schaefer:
@Misti DelMar
Hi Misti!
You certainly have gotten a lot of really great advice here.
While I agree that in order to learn and move forward, you actually have to do something, I personally wouldn’t recommend spending all of your capital and taking on a ton of debt just to do it. You seem very motivated to get going, so at a very minimum, I would reserve some cash in case of unforeseen issues that inevitably pop up when it’s least convenient.
Also, your network is going to be SUPER important, especially because you will not be living near your property. I badly underestimated how important this was and learned the hard way. The best advice I could give is make sure you have workers (handy man, electrician, plumber, etc.) that you trust before getting started.
It sounds like you have a lot going on and would like to diversify your income - that’s a really great move. If it’s helpful, I would be happy to walk you through some of the things I have done to diversify. My property portfolio is pretty unique - ranging from single family homes in other states to local commercial properties - I have a small collection of a bit of everything. It’s still pretty small, but I have learned a ton. I’ll shoot you a message 😊
Yes, I got so much good advice here! I'm kinda surprised by the response! I'm definitely interested in commercial properties too- that's my ultimate real estate goal. I messaged you back. Thanks again!
- Member since 2021 · 63 posts · 37 votes4y
Quote from @Duncan Hayes:
@Misti DelMar saw you said you want to BRRRR a property near a hospital for travel nurses. There's an episode on the podcast about that. Also, you don't need a realtor. Just a little cash and a solid hard money lender. Yeah you need to zone in on where to invest, but once you've done that, along with market research, you can dive in head first. One of the R's in BRRRR means rehab. You can find an off market property that needs work, come in BELOW asking, and negotiate from there. The object is to have the least amount of money left in the deal after the final R is complete. The best way to do that is go after properties that wouldn't be on the MLS.
Hi @Duncan Hayes
Well I didn't think about not using a realtor... hmmm. I do feel like I need my hand held a little bit, at least on the first one to make sure I'm not missing anything. And I'll look for that podcast episode! And yeah, I'm already shutting my biz down for 3 months this summer to focus on this and rehab something! Thanks for the advice! :) - Member since 2021 · 63 posts · 37 votes4y
Quote from @Alex Talcott:
I have never paid over ask on an active listing. It can be done!
Bird-dogging off-off-market properties (not listed, marketed, or any agent involved) would allow you to offer before there's even an ask.
At your level of savings, if you go conventional or commercial financing, there are a few markets that come to mind for a cash-flowing single-family or maybe a duplex. They are in the South and the southern part of the Midwest.
Hi @Alex Talcott,
Thanks for the advice and good to know! I would love to start with a duplex but it seems like people eat those up so fast, I don't know how I'd stand a chance! I am from Tulsa, OK originally and was thinking of starting there since I know the city and it's cheaper. But not married to any location ;)
- Rental Property Investor · New Haven, CT · Member since 2022 · 40 posts · 24 votes4y
Hi @Misti DelMar Don't be discouraged, $20k-$30k will definitely allow you to buy, especially given than you are open to location.
If you are planning to owner occupy you can do 5% down with a conventional loan, or 3.5% down with an FHA loan, which gets you anywhere from $400k to over $650k, which leaves you with tons of options. If you are planning to rehab, you should look into the FHA 203k program, which will allow you to also finance the rehab costs, while still only putting 3.5% down, I did one of those myself. There are more hoops to jump through, but it is definitely possible.
I don't like bidding over asking as it doesn't suit my personality, but one thing to know, just because you bid over asking doesn't mean you need extra cash. The loan will still have the same downpayment requirements regardless of the fact that you offered over asking, as long as the property appraises.
There will be plenty of realtors happy to work with you so don't worry about that at all. Some markets may not work for you, but usually the properties that go over asking are the nicest ones, but since you are looking to BRRR you want the less attractive properties anyway, just look for properties that have been on the market for a month or more and you shouldn't have to worry too much about having to over bid.
Keep up your spirits and good luck! Keep researching and learning, you are on the right path.
- Member since 2021 · 63 posts · 37 votes4y
Quote from @Zeona McIntyre:
You seem to have a ton of replies here, but I'm not sure if anyone mentioned Turn-keys. These properties are often off-market so there is no bidding up, you just need to be on their email list and reserve the property first. If you want to be connected to some vetted turn-key providers. Let me know. Happy to help.
Thanks for the reply! I'm not too familiar with turn-keys. Can you still brrr them? I was kinda hoping to brrr to build my portfolio quicker than working myself into the ground with the biz I own (physically and mentally pretty stressful.) But yeah, I'd love some connections! Open to anything :)
- Member since 2021 · 63 posts · 37 votes4y
Quote from @Michael Hamby:
When searching for properties on the MLS, I use a filter that only shows properties that have been available for more than 14 days. This will help you from wasting time on properties that are going for multiple offers. The residential buyer that will live in the house can usually spend more money than an investor. Houses that have been on the market for more than 14 days usually are overpriced or have some repair that needs fixed. You will want to keep emotion out of it and buy according to your formula for ROI and start a relationship with a contractor. Good luck!
@Michael Hamby Oooo! That's really good advice, thanks!
- Member since 2021 · 63 posts · 37 votes4y
Quote from :
Hi Don't be discouraged, $20k-$30k will definitely allow you to buy, especially given than you are open to location.
If you are planning to owner occupy you can do 5% down with a conventional loan, or 3.5% down with an FHA loan, which gets you anywhere from $400k to over $650k, which leaves you with tons of options. If you are planning to rehab, you should look into the FHA 203k program, which will allow you to also finance the rehab costs, while still only putting 3.5% down, I did one of those myself. There are more hoops to jump through, but it is definitely possible.
I don't like bidding over asking as it doesn't suit my personality, but one thing to know, just because you bid over asking doesn't mean you need extra cash. The loan will still have the same downpayment requirements regardless of the fact that you offered over asking, as long as the property appraises.
There will be plenty of realtors happy to work with you so don't worry about that at all. Some markets may not work for you, but usually the properties that go over asking are the nicest ones, but since you are looking to BRRR you want the less attractive properties anyway, just look for properties that have been on the market for a month or more and you shouldn't have to worry too much about having to over bid.
Keep up your spirits and good luck! Keep researching and learning, you are on the right path.
There's so much good info and hope (haha) in here, thanks! I thought people were just writing the owners of the homes a personal check for like 50k to win the property... It's really nice to hear that it is not always the case. I have degree in interior design, so I'm pretty confident I can take a dump and turn it into something pretty cool on a budget.
Also, good to know that the down payment remains the same as the appraisal. I didn't know that! Thanks again :)
- Member since 2021 · 63 posts · 37 votes4y
Quote from @Joseph Gozlan:
Quote from @Misti DelMar:
I'm buying my first investment property this summer and I've been watching everything in real estate pretty closely (through Bigger Pockets and social media)....
When I'm ready to buy this summer, I'll have 20-30k saved up, that still won't leave room for having 50-100k liquid on the side to pay over asking price, like so many people are doing.
*Do you guys (realtors?) out there think I even have a chance? I'm open to buying anywhere.
*Will realtors even want to work with me if they find out I don't have tons of cash on the side to pay over asking? How bad is it really out there?
(If crypto goes on another run, I will have a lot of $$$- but that's no guarantee)
Thanks for any honesty or encouragement. Trying to mentally prepare.
masking over asking price is a “thing” only in some markets (the hot ones obviously). If you’re really open to “anywhere” then you should do some research on other markets where the frenzy hasn’t reached yet but still have good potential for future growth. As you’ve been told above, limit your “anywhere” to markets you have actually researched and decided are good for your criteria.
As for the cash situation, the easiest way to handle it is to house-hack it. Find a 2-4 units property in a market you’d like to live in and your $20K + FHA loan for first time home buyer can get you a good size investment you can afford.
Good luck!Thanks so much! It's so nice to know that every market isn't paying over asking price. I've been researching markets the past year and have some good ones in mind (including my home town, Tulsa.) I'd love to find a 2-4 unit property but they seem to get sold so fast, I feel like it'd be tough. But nothing is impossible I suppose! Thanks again :)
- Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes4y
Misti you didn't say where you live, therefore; we cannot know what your local market is. Are homes for sale and for rent scarce? Is the local economy good? What type of loan will you get?
If money is tight you don't want to be far from where you are, because if something goes south you won't be able to get to the property to deal with it. If you can't afford a house on a lot, maybe there's opportunities for a manufactured home? A condo? What's the Airbnb business like in your area?
The devil is ALWAYS in the details. Doing a deal just to do a deal isn't good business. You want to find a deal that makes sense. Look at all the options. What CAN you do with what you have to work with?
- Rental Property Investor · New Haven, CT · Member since 2022 · 40 posts · 24 votes4yJust to clarify: the downpayment is not the same as the appraisal, but it is not affected by the purchase price, unless the appraisal comes in below the purchase price. My main point is that the downpayment is not impacted by offering over the asking price (although I still suggest finding a property that you don't need to offer over asking)
Quote from @Misti DelMar:
Also, good to know that the down payment remains the same as the appraisal. I didn't know that! Thanks again :)
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