Get up, fall, get up, fall , what now !

[Shulem Elias]

Hi BP Family 

6 weeks ago I’ve made my decision that I want to invest in RE , I read through the book “The Ultimate Beginners Guide” and once I knew that what I want to do is “Buy $ Hold” (see what I did there!) and the fact was that I will have to be investing “long distance” I purchased another two books “Long distance Real estate investing” by David Greene and  “Multi Family Millionaire” by Brandon Turner and Brian Murray.

I started reading -to be honest quite ‘slowly’- and while I was reading I started getting heads in , I didn’t  search for a property “because I didn’t even know where would be a good start” all I typed in in the ‘find deals’ on BP.com was ‘multi family’ I came across a 3 unit occupied multi family  in Pittsburgh that the price and return seemed to be very profitable. I knew I had the money to make a cash offer. I made some contact in Pittsburgh came  across the nicest people there that helped me to check out the property , I searched many long (and maybe wasted) hours on understanding the areas regarding schoos, crime, renters, etc, - again this is also still a big question how to determine such decisions about areas (guess I will need to read some more). 
the conclusion with the agent that went to look at the property was as follows in his words “This property is not for you unless you find a good property manager. It’s a d neighborhood and tenants are lower income” , I more less knew that still had the feeling that I want to take the risk, so I started searching and getting recommendations for property management in the area , came across someone that seemed fit for the job , that told me from 750 apartments 20 are vacant and were going through applicants asked them to check out the property I was interested in,  they came back and said they could manage it for me. 

Here comes the bummers 

1. I contacted my agent told him that I want he should represent me with the purchase , and I have someone that could manage the property for me, he told me that he does the same service and he could to it do ,  is don’t take me wrong he’s a nice guy and I love him dearly (I did my research in him) , but I wasn’t expecting an agent that told me before unless I have a great PM I shouldn’t go in, and now he’s asking to be the manager?!?!? Just turned me off I didn’t know what to say because I want to continue working with her as an agent but I want to have a different PM going forward.  

2. With the time I decide I’m not going to make a cash offer because I don’t want to be tight up after the closing. So I contacted a mortgage agent went through the option 1 conventional bank loan 2 cash flow program etc then came the estimate and closing costs for taking a loan another 11k+  and here’s where I just lost myself , I wasn’t expecting paying so much more on a loan. 

Here I am now falling apart half knowing that I don’t want to give up , but not really doing anything about it , I know that I should go back to read some more and educate more but,

I feel like I burnt out the people that I worked with until now helping me to find and resource deals. 

I feel like I don’t really know which area to start looking again! 

I know how much money I have in my bank, but how can I know how much money the bank or any other financing option has for me!

If you have any beginning experience I would love to hear about it! 

Thank you 

Each one helps the other,Saying to his fellow, “Take courage!”
(Isaiah.41.6)

[Joe Villeneuve]

First, congratulations are in order here,...but not for a reason you might think.  The best thing that happened to you was not getting that property.  Every step along the way you were making mistakes that would have lead you to disaster:

1 - Don't make all cash offers. The argument for making them is you get a better deal...which is wrong,...it costs you more money. The total cost to the REI is the cash that comes out of your pocket, as long as you have positive CF. If a property is listed at $120k, and you offer all cash and get it for $100k, that property cost you $100k. If on that same property you put up 20% DP, without the discount, that property would have cost you $24k. Remember, with positive CF, the tenant's rent is paying for the rest...not you.

2 - Buying out of town with you first deal.  You don't know what to look for, and don't know anyone in the area to look for you, that you can trust.  If you didn't have an agent that warned you about the property you were interested in, you might have bought it.

3 - Even though that agent warned you about the property, you decided to move forward with it.  Why?  You should send that agent a Christmas card every year saying "thank you".

You seem to be getting a lot of information, from a lot of sources, but no real education...yet. If you are a slow reader, and expect to be ready to buy your first REI within 6 weeks of starting, you're dreaming,...and that dream will be a nightmare. You have a lot of learning to do first, and not from books...from people with experience.

One last thing, keep this in mind at all times, whenever your emotions start to battle logic (math).  Sometimes the best deals you make are the ones you don't.  Learn to walk away,...sometimes run.