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.
If I were to start over again, I would wholesale starting out. When you think you have a deal and you try to sell it to a season investor in the area who knows what they are doing, they will let you know if the property you are looking at is a real deal or not. Do a few of those, and you'll be confident when you find the right deal to pull the trigger on for yourself!
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
This is great advice! thank you so much!
If I were to start over again, I would wholesale starting out. When you think you have a deal and you try to sell it to a season investor in the area who knows what they are doing, they will let you know if the property you are looking at is a real deal or not. Do a few of those, and you'll be confident when you find the right deal to pull the trigger on for yourself!
ahh sounds like a good idea! I don't have much experience in the space of wholeselling but ill definitely look into it! thanks so much for the advice
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.
This is great! Thanks so much for your reply! Yes, I definitely have the aforementioned items above and I am currently using this platform to network with professionals (which you all have been great). Perhaps after my preapproval process I can connect with local real estate agents. question for you, what would be the difference working with a real estate agent vs a real estate broker?
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.
ahhh this is great advice! I will definitely be keeping this in mind. thank you so much for your reply!
I'm right there with you! we'll get there buddy I know we will.
Lets get it! haha
First, I became determined. I made up my mind that I was going to buy a cash flowing property. I focused on a duplex or house hacking. I then evaluated deals daily, using the BiggerPockets rental calculator. I became very knowledge about the area I wanted to buy in. I knew off the top my mind what individual room rented for, how much water/trash cost and taxes. I got my lending and down payment lined up. I did all this so that the day a deal came up I would be ready to place an offer. My final push was that I became determined.
First, I became determined. I made up my mind that I was going to buy a cash flowing property. I focused on a duplex or house hacking. I then evaluated deals daily, using the BiggerPockets rental calculator. I became very knowledge about the area I wanted to buy in. I knew off the top my mind what individual room rented for, how much water/trash cost and taxes. I got my lending and down payment lined up. I did all this so that the day a deal came up I would be ready to place an offer. My final push was that I became determined.
Thank you so much for your advice! I DM'd for more info!
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.
That is good advice Konstantin. Like it or not the physiological aspect of real estate is real.However putting in some safeguards mentally go a long way.
@Allan Tualla If you're looking for residential work a local RE agent; preferably a person that owns investment property. A broker typically manages, works for, or owns a large firm. I generally correlate brokers to larger multi-family deals.
Preapproval is huge. I wouldn't even talk to an agent without it. Have a plan or strategy so they can tailor your search. Don't waste people's time and they won't waste yours.
I spent a year in the same situation. Got stuck in investing TikTok during covid and just researched every possible outcome I could think of. I used the research and such to feel like I had some control (hah) while working an extremely stressful job and to destress at end of the night. Finally realized that I was talking constantly about the what ifs with anyone who would listen and had the money saved but wasn't making any moves. Finally I just jumped on a house that was a great deal that I thought would be good and figured talk was cheap but actually feeling like I was doing something was worth the money spent. I will say however that I wasn't able to scale (even in my own small way) until I left my stressful job and could focus on the actual process. Probably dont suggest that being the best option but it worked for me.
I understand the analysis paralysis that comes with real estate investing. To break free from it, focus on two things: education and taking action. Learn from books, podcasts, and forums like Bigger Pockets, and then take the leap by making that first purchase. Start small, trust your research, and learn from the experience.
For many people, there were no books, podcasts, or forums. There is no better way to learn the market, refine your buy box, and learn to invest than analyzing real opportunities...and making offers.
I totally get it. A couple of things that helped me get "over the hump."
1. I house hacked my first two properties. This allowed me to have a roof over my head while bringing in income. It reduces the risk.
2. I partnered up with someone who had more experience. We discussed our goals, our business philosophy, and we split the risk.
3. Look in markets that might be in a lower price point. For example, being in Los Angeles, I did my first BRRRR in Birmingham, AL. I could handle the risk of carrying costs, and made sure the numbers made sense.
4. Understand that real estate is a long term gain. One of my favorite phrases is "it is okay to stumble, as long as you stumble forward." You are going to make mistakes, and that's okay. It is the education that helps you along the way, as well as having a great team backing you up.
WhenI mention that I need to analyze the issue further to determine the cause of the situation, my previous manager used to say: “analysis is paralysis “.
My reply was:
“No. You need to do some analysis so you don’t make assumptions or perform uninformed decisions. But when you get your answer, move on to define and execute action items. Now, Over analysis and paralysis are both simply symptoms of fear of the unknown.”…glad he’s my previous manager.
So the main problem is fear and understandably so! A home is a huge investment. One mistake and you’re in major debt for years. Fear of what could happen, the unknown.
The over analysis is the art of to trying to increase your confidence by identifying every possible use case to relinquish concerns. You keep going because it doesn’t lessen, hence paralysis.
What to do then?
- Attend a local meetup. You’ll meet some nice folks and there is no risk here.
- Get a pre approval from your bank. Call this a win when you get it. Now, I know you can get better rates by looking further but the point of this action is to see “yea, this is possible!”
-Look at Zillow, trulia, Xome, and/or realtor.con. Get to see how different neighborhoods sell. No risk here and it’s fun!
- Look up a realtor that specializes in REI via google. Tell them your goals. Again, low risk as you don't have to pay them.
- Use the realtor to visit some homes. Attend open houses. Get used to the customs of Don’t this. Only cost is the travel but it’s pretty fun (at least for me it is).
Trust me, I know the MLS listings and off-market/wholesaling deals are better. But the goal here is to reduce anxiety but looking at the homes.
You may even find a great deal. Look at what these forums say are the next steps and ask the realtor questions.
Don’t worry. You can do this!!
@Allan Tualla
Hey man, I was in your exact situation a little over a year ago. Acquired my first deal and I have to say, it’s not as bad as you think. We get too caught up in the “What ifs”. The truth is, the more we focus on the things that worry us, the more it magnifies. So, take a leap of faith. Like others have said, you learn the most by doing.
As Michal Jordan said: There are 3 types of people. “Some people who want it to happen. Some wish it would happen. And others that make it happen.”
So take a look at the person in the mirror and ask yourself, “Who do I want to be?”
-Jerome
I totally get it. A couple of things that helped me get "over the hump."
1. I house hacked my first two properties. This allowed me to have a roof over my head while bringing in income. It reduces the risk.
2. I partnered up with someone who had more experience. We discussed our goals, our business philosophy, and we split the risk.
3. Look in markets that might be in a lower price point. For example, being in Los Angeles, I did my first BRRRR in Birmingham, AL. I could handle the risk of carrying costs, and made sure the numbers made sense.
4. Understand that real estate is a long term gain. One of my favorite phrases is "it is okay to stumble, as long as you stumble forward." You are going to make mistakes, and that's okay. It is the education that helps you along the way, as well as having a great team backing you up.
Great tips! Thank you so much!
WhenI mention that I need to analyze the issue further to determine the cause of the situation, my previous manager used to say: “analysis is paralysis “.
My reply was:
“No. You need to do some analysis so you don’t make assumptions or perform uninformed decisions. But when you get your answer, move on to define and execute action items. Now, Over analysis and paralysis are both simply symptoms of fear of the unknown.”…glad he’s my previous manager.
So the main problem is fear and understandably so! A home is a huge investment. One mistake and you’re in major debt for years. Fear of what could happen, the unknown.
The over analysis is the art of to trying to increase your confidence by identifying every possible use case to relinquish concerns. You keep going because it doesn’t lessen, hence paralysis.
What to do then?
- Attend a local meetup. You’ll meet some nice folks and there is no risk here.
- Get a pre approval from your bank. Call this a win when you get it. Now, I know you can get better rates by looking further but the point of this action is to see “yea, this is possible!”
-Look at Zillow, trulia, Xome, and/or realtor.con. Get to see how different neighborhoods sell. No risk here and it’s fun!
- Look up a realtor that specializes in REI via google. Tell them your goals. Again, low risk as you don't have to pay them.
- Use the realtor to visit some homes. Attend open houses. Get used to the customs of Don’t this. Only cost is the travel but it’s pretty fun (at least for me it is).
Trust me, I know the MLS listings and off-market/wholesaling deals are better. But the goal here is to reduce anxiety but looking at the homes.
You may even find a great deal. Look at what these forums say are the next steps and ask the realtor questions.
Don’t worry. You can do this!!
This was awesome! thank you so much for this post!
@Allan Tualla
Hey man, I was in your exact situation a little over a year ago. Acquired my first deal and I have to say, it’s not as bad as you think. We get too caught up in the “What ifs”. The truth is, the more we focus on the things that worry us, the more it magnifies. So, take a leap of faith. Like others have said, you learn the most by doing.
As Michal Jordan said: There are 3 types of people. “Some people who want it to happen. Some wish it would happen. And others that make it happen.”
So take a look at the person in the mirror and ask yourself, “Who do I want to be?”
-Jerome
This definitely helps my anxiety and I'm diggin' the Jordan quote! jumping in this forum has definitely put a lot of things into perspective and everyone here is helpful and have a positive outlook on things! thanks for your response!