getting out of analysis paralysis
Member since 2023 · 41 posts · 15 votes
Hello everyone,
I feel like I've been stuck in the whole analysis portion of realestate, from reading books, watching pod cast and now joining the bigger pockets forums. with that being said how did you all get out of the "analysis paralysis" portion of investing. what made it easier for you? I've heard that the first property was the hardest and it gets easier from there, but what ultimately pushed you to finally make that first purchase
By asking this question it tells me two things:
1 - You don't know how to, or don't understand what you're analyzing, or how to interpret it.
2 - You don't understand or know how the analysis relates to any strategies you know...or don't know any strategies.
There are three things every successful REI must know/have:
1 - The ability to analyze markets, not individual properties, markets.
2 - How money works.
3 - How to develop a REI Plan based on your SPECIFIC financial goals.
By asking this question it tells me two things:
1 - You don't know how to, or don't understand what you're analyzing, or how to interpret it.
2 - You don't understand or know how the analysis relates to any strategies you know...or don't know any strategies.
There are three things every successful REI must know/have:
1 - The ability to analyze markets, not individual properties, markets.
2 - How money works.
3 - How to develop a REI Plan based on your SPECIFIC financial goals.
Hello everyone,
I feel like I've been stuck in the whole analysis portion of realestate, from reading books, watching pod cast and now joining the bigger pockets forums. with that being said how did you all get out of the "analysis paralysis" portion of investing. what made it easier for you? I've heard that the first property was the hardest and it gets easier from there, but what ultimately pushed you to finally make that first purchase
Here is one of my posts that just may get you going,
WHO IS SPINNG THEIR WHEELS ? (biggerpockets.com)
All the best
By asking this question it tells me two things:
1 - You don't know how to, or don't understand what you're analyzing, or how to interpret it.
2 - You don't understand or know how the analysis relates to any strategies you know...or don't know any strategies.
There are three things every successful REI must know/have:
1 - The ability to analyze markets, not individual properties, markets.
2 - How money works.
3 - How to develop a REI Plan based on your SPECIFIC financial goals.
Thank you so much for the comment! yea i mean it could be a combination of both. I have a goal in mind, i know what properties i want to aim for and I know the CoC return to aim for. what i fear most i guess is the inherent dangers that come with investing and how to handle it when it arises as a new invester.
Im currently aiming for medium to long term rental properties in the small multifamily space. Ive gotten good information from others here in regards to expenses (esp cap ex items) and in general I know i want to, at the very least, have an 8% CoC return. I have the tools here from bigger pockets (rental property calculator) and generally just plug and play, however i know things vary from property to property. Just looking for more advice to better equip myself for purchasing my first property and so on
Hello everyone,
I feel like I've been stuck in the whole analysis portion of realestate, from reading books, watching pod cast and now joining the bigger pockets forums. with that being said how did you all get out of the "analysis paralysis" portion of investing. what made it easier for you? I've heard that the first property was the hardest and it gets easier from there, but what ultimately pushed you to finally make that first purchase
Here is one of my posts that just may get you going,
WHO IS SPINNG THEIR WHEELS ? (biggerpockets.com)
All the best
Thank you so much! this definitely helps!
-Allan
By asking this question it tells me two things:
1 - You don't know how to, or don't understand what you're analyzing, or how to interpret it.
2 - You don't understand or know how the analysis relates to any strategies you know...or don't know any strategies.
There are three things every successful REI must know/have:
1 - The ability to analyze markets, not individual properties, markets.
2 - How money works.
3 - How to develop a REI Plan based on your SPECIFIC financial goals.
Thank you so much for the comment! yea i mean it could be a combination of both. I have a goal in mind, i know what properties i want to aim for and I know the CoC return to aim for. what i fear most i guess is the inherent dangers that come with investing and how to handle it when it arises as a new invester.
Im currently aiming for medium to long term rental properties in the small multifamily space. Ive gotten good information from others here in regards to expenses (esp cap ex items) and in general I know i want to, at the very least, have an 8% CoC return. I have the tools here from bigger pockets (rental property calculator) and generally just plug and play, however i know things vary from property to property. Just looking for more advice to better equip myself for purchasing my first property and so on
ahh ok, so thats new to me as Ive generally just focused on property. ill look more into that to get a greater understanding on how the market is. Any tips you could provide, it would be much appreciated!
-Allan
ahh ok, so thats new to me as Ive generally just focused on property. ill look more into that to get a greater understanding on how the market is. Any tips you could provide, it would be much appreciated!
-Allan
There’s no other way to answer this question then to take action. Analysis paralysis is a fake diagnosis. Stop admitting to it, start taking real action.
do you have cash for a down payment and reserves?
If you have cash for the DP, and/or money for a rehab, financial stability, and a strategy you already have 75% of the pieces. What you need a network of professionals and an agent to show you properties.
Start walking properties that fit you're [buy box].
Don't waste your time on duds. If the numbers are way off don't waste an agents time.
If you buy a property at (x) price maximize the outcome. Having some flexibility is huge. Maybe a cash-flow rental isn't going to plan. Buy it correctly so you can flip instead.
Stick to your numbers and investing goals. Every property has a purpose. Every property needs an exit strategy. You can't predict the future but you can make educated assumptions about the market, neighborhood, and street.
All this info, books, videos, BP etc… won’t show you the best opportunities in a given market. They are just guidelines.
You do need to focus on analysis, and analysis of every deal. There are opportunities in every market. What’s challenging for investors is they don’t actually have access to the tools and process that these gurus and institutional investors have. They tell you what they are doing, not actually provide the platform for HOW they do it.
The simple fact is that action is much more important than endless education. You'll learn WAY more by jumping in and doing a deal or two than you will ever learn through podcasts, mentorships, books, etc.
Your first deal will be scary. Your second deal will be stressful. Your third deal will be hard, your fourth deal will be fine, your fifth deal will be fun, etc, etc.
The lowest states way to get in is to house hack. You are paying rent or a mortgage now, right? Why not leverage that money in to something that will become an investment for you? Live in BRRRR in a MFH using an FHA loan is a total no brainer, almost impossible to lose. That's where I'd start if I were in analysis paralysis.
Best of luck!
The simple fact is that action is much more important than endless education. You'll learn WAY more by jumping in and doing a deal or two than you will ever learn through podcasts, mentorships, books, etc.
Your first deal will be scary. Your second deal will be stressful. Your third deal will be hard, your fourth deal will be fine, your fifth deal will be fun, etc, etc.
The lowest states way to get in is to house hack. You are paying rent or a mortgage now, right? Why not leverage that money in to something that will become an investment for you? Live in BRRRR in a MFH using an FHA loan is a total no brainer, almost impossible to lose. That's where I'd start if I were in analysis paralysis.
Best of luck!
That first real estate investment is without a doubt, the hardest one since it requires a leap of faith. If you feel like you are at the education level required to take that plunge, then sooner or later you will simply need to jump in. One strategy I used that helped ease some of the stress for me on my first property was selecting a property where I knew I would be able to pay the mortgage costs even if we were not getting rented. By ensuring I had the financial means to pay this expense in a worst case scenario, it allowed me to dip into real estate investing while limiting the stress I would be placing on myself if things did not go smoothly. Once I took this first step, I became far more comfortable with the process and was able to apply everything I had been reading and researching prior while at the same time, learned far more from actually taking that plunge.
I think the advice of those more experienced that you is always what should be listened to- more than just words on paper or in a podcast. Those are obviously great tools, but a mentor or simply someone who understands your particular situation and can advise you directly is invaluable. Other than that, what everyone else has said- just get started! Indecision is the opposite of productivity.
Get pre-approved for a loan. Once you have financing sorted you will want to pull the trigger on a deal. Also, network with people who have been through the process.
My suggestion would be to attend some of your local investor meet-ups and let people know what your ideal first deal looks like and then grow out that network.
Another suggestion would be to partner with another investor. Do the leg work, if its a flip do the labor that you can do like cleaning up the yard, maybe painting, demoing etc.
Don't overcomplicate this, get working.
Every deal is made up of three parts TIME, MONEY, and SKILLS which one do you have?
I think that all of the other contributors here are providing some sound advice! I understand that California is a little more of an arduous state to invest in (due to increasing prices, LLC Fees, Tenant/Landlord Laws, etc.), yet have you thought about investing in an area that is a little more cost-effective? How about partnering with someone who has experience with the business strategy you want to engage in?
As someone who's from New York City, I completely understand how impossible a cost-efficient real estate investment may sound, yet I would suggest connecting with people here on the forums (& beyond) so you can get more comfortable with the steps necessary for investing in Real Estate.
I think the advice of those more experienced that you is always what should be listened to- more than just words on paper or in a podcast. Those are obviously great tools, but a mentor or simply someone who understands your particular situation and can advise you directly is invaluable. Other than that, what everyone else has said- just get started! Indecision is the opposite of productivity.
I can attest to what Eric has mentioned here. I did the same for my STR Units in Austin. It does take a leap of faith that is done with the backing of solid analysis and knowledgeable members on your team to fulfill tasks you're either uncomfortable overseeing (like acquisitions, bookkeeping, etc) OR who can be consulted just for advice.
By asking this question it tells me two things:
1 - You don't know how to, or don't understand what you're analyzing, or how to interpret it.
2 - You don't understand or know how the analysis relates to any strategies you know...or don't know any strategies.
There are three things every successful REI must know/have:
1 - The ability to analyze markets, not individual properties, markets.
2 - How money works.
3 - How to develop a REI Plan based on your SPECIFIC financial goals.
Thank you so much for the comment! yea i mean it could be a combination of both. I have a goal in mind, i know what properties i want to aim for and I know the CoC return to aim for. what i fear most i guess is the inherent dangers that come with investing and how to handle it when it arises as a new invester.
Im currently aiming for medium to long term rental properties in the small multifamily space. Ive gotten good information from others here in regards to expenses (esp cap ex items) and in general I know i want to, at the very least, have an 8% CoC return. I have the tools here from bigger pockets (rental property calculator) and generally just plug and play, however i know things vary from property to property. Just looking for more advice to better equip myself for purchasing my first property and so on
That is some solid advice! I can attest to that, considering my STRs were in the same market (because all of the homework had been completed for the initial investment, so it didn't have to be conducted again).
Hello everyone,
I feel like I've been stuck in the whole analysis portion of realestate, from reading books, watching pod cast and now joining the bigger pockets forums. with that being said how did you all get out of the "analysis paralysis" portion of investing. what made it easier for you? I've heard that the first property was the hardest and it gets easier from there, but what ultimately pushed you to finally make that first purchase
I can sense right away this is not an information, market research or analytical problem. Obviously not because you said yourself its "analysis paralysis."
There's only one reason I was stuck in this a few years ago.
I didn't believe I can wholesale houses and get a $5,000-$20,000 check.
I was more afraid of winning than losing. If I won, it meant I didn't deserve it. It meant it was a scam. It meant I was going to be "shady" because I did something that wasn't average, the norm or the amount of money in one check most do not receive.
So I have to ask you Allan, if you bought your first property, did your first wholesale deal, got your first house hack or whatever your goal is, WHY would you want that deal completed if nothing stopped you? Write that down. Once you get outside of yourself, it's going to happen. You have family counting on you. Friends counting on you. You need to be an example. Make it happen.
@Allan Tualla
I didn’t know anything about RE and made a dumb offer after a few beers for my first. It got accepted and got me in the game! So I would say I’m the opposite. Iol. I’ve made some not so great purchases, but after a few years, they all looked great. Don’t over think it.
I'm right there with you! we'll get there buddy I know we will.