Senior Marketing Manager, Memberships · Denver, CO · Member since 2022 · 48 posts · 276 votes
Ashley Kehr, author of Real Estate Rookie and co-host of the Rookie podcast will be taking over the BiggerPockets' Instagram tomorrow to answer all your rookie investing questions and discussing how to overcome obstacles to getting your first rental!
👉 What has/is preventing you from buying your first rental property?
⬇ Comment below ⬇ and tune in tomorrow on Instagram for @Ashley Kehr's advice!
For me, it has been the rehab process. I haven't had good luck finding contractors and workers for small projects at my home. Would love to connect and get some guidance.
Biggest obstacle for me is finding a deal where the numbers make sense and work. I am in East valley Phoenix market and prices are coming down but with the interest rates where they are now, finding a deal on something where the numbers make sense with 3-5% down payment is very difficult.
Analysis paralysis I see it every day. So many read books and tapes and sit on the internet " researching " Researching what, you do not have any idea about the area LOL . I even provide exactly what they ask for and some still do not pull the trigger. Why many it so much more complicated, just connect with those that provide rentals with PM in place and stay out of their way. Its not your job to be an expert its theirs
Biggest obstacle for me is finding a deal where the numbers make sense and work. I am in East valley Phoenix market and prices are coming down but with the interest rates where they are now, finding a deal on something where the numbers make sense with 3-5% down payment is very difficult.
Question of niche, lack of information. In other words, deciding what their personal differentiator will be: SFH vs STR vs furnished rental vs flip. *We* all know you can't do *all* those things, but the beginner may not...and then try while being overleveraged right out the gate. Then inevitably fail. Topic proposal for the podcast/instagram Live: Buyer Differentiator, and saying No to otherwise good deals that fall outside of your pre-established/chosen niche and real estate identity.
Thanks for doing this! I'll be tuned in and this is the content we need!
Trouble finding good deals, and also issues with financing deals when I do finally find the good deals.
Deals are everywhere, I turn down 10 15 a week, its ALL about your network
I turn down probably 5-10 per week so I kind of understand your point here. But why do I turn them down? Because after a quick underwrite, I determine they are not deals after all.
@Colby Zeller points out a very real challenge for new and experienced investors. Finding real deals is one of the hardest parts of this business.
I'm not a rookie but I'll comment what I think is holding most rookies back based on convos I have at meetups and what I see around the forums:
1. They don't have the money for a down payment. And "creative finance" deals are much easier said than done.
2. They can't make the numbers work with high interest rates (unless they put a ton of money down, which brings us back to issue #1)
This! I want my own house, and taking from my savings to put a down payment on an investment property is only going to delay that. The places I can afford to invest in at the moment are places I have no interest in living in. So I definitely would be open to the "creative financing" piece
Trouble finding good deals, and also issues with financing deals when I do finally find the good deals.
Deals are everywhere, I turn down 10 15 a week, its ALL about your network
I turn down probably 5-10 per week so I kind of understand your point here. But why do I turn them down? Because after a quick underwrite, I determine they are not deals after all.
@Colby Zeller points out a very real challenge for new and experienced investors. Finding real deals is one of the hardest parts of this business.
I turn them down as well I cannot buy them all and my buyer's network is not like it used to be. The 500 or so I did the majority were during about a 4 year time span
As a 19-year-old with very limited capital, are there any FHA loans that would help me get started in real estate investing? I would like to enter in the market later this year or next year when the market is down but with little money, is creative finance my only option?
Also, how do you identify a perfect first property to invest in without over analyzing it?
Being excessively picky about where you want to live (the location or the property itself) if you are looking to buy a place you'll also be living in. Don't look for a perfect deal, find one you can do safely. Cash is always a issue with new investors as well as experienced investors (winning Powerball would certainly put a lot of us on this forum into a buying spree). Buying with absolutely no cash out of pocket is not impossible, but very rare.
If you're a new investor, I would recommend running your first deal(s) by an experienced investor (you don't have to give them the property address if you don't know the person very well). They can spot issues and ask questions you might not have thought of. These might not be deal breakers, but every property will need maintenance at the very least so you want to be prepared going forward even when you have a textbook deal. I would recommend doing this in person. This forum has in person investor events in the Classifieds /Events & Happenings section, with geographic location in the drop down menu. Trying to run a deal scenario as a forum question ("Is this s good deal?" open question) is not easy, unless you have very specific questions.
For me, it has been the rehab process. I haven't had good luck finding contractors and workers for small projects at my home. Would love to connect and get some guidance.
Value add investing:
Contemporary difficulties of reliable contractors, labor, and materials along with their higher costs and lack of timeliness for all three.
As a 19-year-old with very limited capital, are there any FHA loans that would help me get started in real estate investing? I would like to enter in the market later this year or next year when the market is down but with little money, is creative finance my only option?
Also, how do you identify a perfect first property to invest in without over analyzing it?
@Logan Grissom depends on your market and what reserves you currently have to make a 3.5% down payment. Given that you are young, lenders will likely have trouble lending you large amounts of money (credit needs more time to build.) I suggest looking for a partner / having parents co-sign mortgage with you. Would this be a house hack or primary residence?
Also lenders prefer to see W-2 wages when applying for loans. If you do not have a consistent job (they usually look for 2 yrs consistent occupation) I would suggest getting one.