Feeling overwhelmed and discouraged
I'm 43 and wanted to invest in real estate. I am trying to learn but for whatever reason it feels over my head. What resources exist for absolute beginners? I tried going to a local meetup and felt really out of place. Speakers immediately started using acronyms I had no idea what was going on. Also financially I don't know if this will make sense. Even assuming best case scenario the soonest I can save 25% down is another 2 years away. I spoke with a property management company and she was helpful but I just don't think I can do this.
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#3 Personal Finance Contributor
- Rental Property Investor
- Denver, CO
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#3 Personal Finance Contributor
- Rental Property Investor
- Denver, CO
@Kenneth D. - BiggerPockets is built for you. This is the challenge. You are right on track, you are doing it right, and everyone feels this way when starting out. We have these forums, the podcasts, books, and more. Please email me at [email protected] and I will send you a free copy of one of the books to get you started.
Aside from that, it is an immersion. Many (most? All?) of the investors here go through an immersion period of literally 100+ hours, including books, forum lurking/posting, blog reading, YouTube video watching, networking with agents and other investors, etc.
That's before they feel COMFORTABLE with even taking the next steps towards buying that first property.
And yes, being two years away from that first or next down payment is totally normal. Many investors, certainly myself, went through a 12-15-24 month "grind" to accumulate the cash to invest in real estate. A grind that repeats between each of the early deals. It can be frustrating watching hotshot social media stars seemingly getting to the endgame overnight, but know that for every smiling photo on the beach are underlying risks/advantages/secrets that may not be exposed on the surface. Some of those who got rich quickest will give it all right back. But, if you approach it as a grind, with a long-term outlook, you can look up in 7-10 years with a solid pile of equity and a surprisingly large and/or reliable stream of income.
You are doing it right. Sit back, make REI self-education a hobby, on the side, for free or the cost of a few books, and when you are well-capitalized, speak the language of REI fluently, and have a clear and compelling thesis for the type of deal that will meet your goals, set yourself up to act with a combination of boldness and conservatism that feels right for you.
I love your style. How do you get a good lawyer, CPA, agent and property manager?
Life can be lived however you possibly want. Figure out how.
I work with a lot of first-time investors and this is what I suggest for them:
1. Decide what type of investor you want to be. There are many ways to invest in real estate and there is no right or wrong answer for how you do it. Do you want to wholesale? Do you want to flip? Do you want to house hack? Do you want to buy and hold and if so, what part of the tenant market do you want? Long term rentals, short term rentals, student, vouchers, etc.
2. Identify where your resource constraints are. Are you tight on money down or is income/credit an issue?
3. At the end of the day, whatever money you make in real estate is going to come from appreciation in the property value, cash flow from rent, and/or principle paydown of you mortgage by a renter. Which of these are most important to you?
Once you have a handle on the three items above, many of the other decisions fall into place like where to invest, what type of property fits your investment profile, and what loan product suits you needs best.
For example, if you decide appreciation is most important to you but money down is an issue, you might be best served by buying a single family home, living in one room and renting out the others. Doing so would enable you to get a first-time buyer's loan like FHA 3.5% down.
Or, if money down is not an issue but income verification is, you can go with a debt service coverage ration (DSCR) loan which only looks at the property's cash flow ability and not at your personal income.
Where I see first time investors fail is on a few fronts:
1. They never pull the trigger. They analyze and shop and dream about it but never do it. Don't be one of them.
2. They don't level with their lender and realtor which results in properties that are off-target or a loan approval that falls apart later in the process.
3. They don't build their team. Find a great lender (not necessarily the cheapest, believe me the right lender matters) and find a great realtor that can help you identify the right properties to meet your investment goals.
It is a one-foot-in-front-of-the-other thing. Decide on your answers to the items above, break it down into steps and then pull the trigger.
I am happy to help, just reach out to me on Bigger Pockets and we can jump on a call together.
I got started at 37. Took about 2 years to save up enough for my first property. It's well worth the wait. It goes slow in the beginning, but many more possibilities present themselves as time goes on. Learn what you can. Start building a team. Set up a good foundation and build the confidence for when you can act. This market is tough for new investors, in two years it may be a more favorable environment. Set yourself up as best you can and set some goals for the short and long term.
@Kenneth DiGiovanni Jr Don’t give up! This isn’t a get rich quick scheme, it’s not something you pick up in a weekend. Continue to be a sponge, soaking up information, listening to podcasts, meeting people, going to meet ups. When people talk, take notes, look up those acronyms later. Ask questions! People are always happy to help.
- Journey Toole
"Hey there! First of all, it's fantastic that you're exploring real estate investing. Remember, everyone starts somewhere, and it's okay to feel a bit overwhelmed initially. Don't let the jargon discourage you; it's all part of the learning process.
Financially, saving for a down payment takes time, but it's a significant step. In the meantime, keep educating yourself, maybe start with online courses or books for beginners. Knowledge is your greatest asset.
Believe in yourself and your ability to learn and grow in this field. It might seem challenging now, but with persistence and the right resources, you can definitely make it happen. Stay positive and take it one step at a time!" 🌟💪
I first found my agent using the biggerpockets agent finder tool: https://get.biggerpockets.com/agent-finder-rm/
As far as finding a good agent, I was looking for someone where a) we had a similar style of communication, b) did real estate investing themselves, and c) was honest when they didn't know something.
I don't really have any more useful advice beyond that. I had to stumble between 3-4 agents before I landed on someone where I felt we "clicked".
Then after finding my agent, I leveraged their existing network. They connected me to a property manager.
Finding a good CPA and lawyer is tough, I'm still looking for them. As a guideline, after going through many bad and okay ones, I expect to pay somewhere between $2500 - $5000 for a CPA a year (probably $50-$300 per hour if only done hourly), and a lawyer will probably bill $300 - $500 per hour. I will also be able to deduct these expenses from my taxes, so I'm not too concerned with spending more money and time upfront to save on the headaches later.
I started when I was 44 and was completely clueless. Give yourself a year or two to learn the ropes. Don’t give up!
Look into different groups as sometimes some just might not be a fit. Additionally, it can feel like a bit of a "hurry up" or feel like you meet these people with 10, 100, 500 doors and it "seems easy". Never compare as everyone has a different journey. Finally, don't feel obligated. There are so many ways to generate wealth in, around, and out of real estate. If you never really feel comfortable, it will only need to regret and frustration and provide the opposite of what you want (anything in life...not just becoming an investor).
Its only complicated if you dont have money and are trying to get fancy. Millions of people who have never heard of BP or all the acronyms just go out and buy a second home and rent it out. It would be good if you can do basic math to figure out if you will make money or not doing it but other than that its no different than buying a house to live in. Now when you try to "house hack" your way with "OPM" into a "BRRRR" situation it may get a bit hairy.
Real Estate Investment doesn't have an age limit. It can be started at any age. My advice would be to connect with as many people in the area as you can. The more connections you make in the field the more confident you will feel. Don't give up and good luck!!
It can take a couple years to save up 25% which can seem like forever and a bit intimidating. If you're in the situation where you're able to house hack something like a duplex, triplex, or fourplex - consider doing that to get started. It's the best way to learn how to landlord when you're just starting out. You can put as little at 3.5-5% down and at the same time you're able to avoid renting somewhere else because you'll be living in one of the units.
Two books I would recommend to read - Rich Dad Poor Dad by Robert Kiyosaki and How to Invest in Real Estate by Brandon Turner.
Keep at it, you're in the right place. Best of luck!
- Scott Allen
- [email protected]
- 614-698-1227
Brother you are in the right place. I bought my first property about two years ago. I have had a tenant coming up on a year. I went to Biggerpockets for the first time last year and said I wanted to have two more properties by BPCON2023. Well I only have one more but its progress. The point is you are in the right space with people who are just like you. I would suggest really taking advantage of these forum, watch the videos on Youtube. Then set a goal to take action. That's the biggest part.
I bet you are in a better place than you think you are. Its just the fear of jumping off that cliff. I get it but what I have also learned is that the cliff is not as high as you think it is and there will be more cliffs until the cliffs become little bumps in the road.
Just a quick piece of my story. I made good money at work but was afraid to risk my primary income on trying real estate. During COVID when interest rates were low I got my notary commission and started doing mobile notary. I was making $3,000 a month doing real estate closings and refinances. It gave me enough extra income to feel comfortable to take that jump. There are lots of ways to find the money. In the beginning funding feels like its the hardest part of the process. Later you will find that its one of the easiest parts. Good luck to you! If you check my profile you should be able to find the story of my first property. I think it did everything wrong! However, it has still work out!
Welcome to the BP community Kenneth! This site is an incredible platform that has numerous resources so definitely take advantage of it all. I totally understand being overwhelmed but you're in the perfect place to learn. I would love to connect!
Really amazing response. You seem super competent!! What are 3 things from each that you’ve learned where you need a lawyer and CPA for?
Love this. Could you help me?
Strengths: People skills, carpentry, gifted (IQ), career is math teacher, love analyzing deals, pretty good instincts with numbers, etc, lots of experience flipping home owner houses (hired by others to renovate bathrooms, kitchens, and have done whole house gut renos), degree in mathematics and interior design, basically skilled at making profit for not a lot of $$, knows what neighborhood I want to buy
Weakness: not a lot in savings, not clear judgement who is a good lender or agent (easily ‘fooled’), credit isn’t strong either because I just went through a divorce
What do you suggest? I want to pull the trigger.
#2 Commercial Real Estate Investing Contributor
- Developer
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#2 Commercial Real Estate Investing Contributor
- Developer
Day 2. You still only have one post.
By now you should have posted a deal analysis and asked for input. Go online and pick the first house that is in your area and do a 5 minute deal analysis and post it. If you take 6 minutes you failed the exercise.
Throw all your video games away, stop watching YouTube or Facebook.
Don’t watch any more podcasts, stop reading books, stop watching real estate YouTube.
To become wealthy you need: 1. Money sometimes, 2. Business idea, 3. Willing to jump off the cliff and dive in.
You have had many people with some great
REI backgrounds respond to you.
If all of them and you were to start at zero wealth with the knowledge you and they currently have. I would pick you to be worth a $1mm in the next 3 years.
There are some very strong players in this post. But you are the one I would go with to be worth $1mm in 3 years.
On your next day off want you to pack your bags for an overnight trip. Call the realtor ahead. Drive up I49 to Shreveport. Look at the property on 681 Mt Zion.
1. Run the numbers.
2. Write down the solution to the problem. You’re already trained for this.
3. Find money. Write a post on this forum. Within the BP group you will ask for $100k loan at 5% interest only for 2 years paid annually. At the end of year two you will pay them their original $100,000 plus another $100,000. They will be required to work you thru their commercial banker and get an SBA loan 10% down. You won’t get a commercial banker to give you the time of day with your background and todays tightened bank market.
4. You should keep your day job and manage remotely. Year three recommend you go full time into REI.
You want to do house rentals. I keep hearing $200 per door cash flow. How many deals do you have to do? How many customers to get to your current 8 to 5 pay? How much money do you need?
Keep at it and don't give up! It takes countless hours of reading, listening, asking a million questions, analyzing properties, looking, etc.
You are in the right place, we've all had those same feelings, you're not alone - you've got this!
@Jennifer Fernéz Low money down plus weak credit is a bit of a double whammy but not insurmountable. There are a couple of avenues for you.
1. You can talk to a credit union or community bank who do not sell their loans off to the market. That enables them to be more flexible on terms. Here in NC we have the State Employees Credit Union (our teachers are state employees), I do not know which credit unions are in PA but I bet you can find one you can join.
2. If the lenders in 1 cannot help, there are programs designed to help lower income people (you are a teacher like my wife so 'nuf said there) with poor credit. You will have to live in the home for a while (maybe house hack the other rooms). One example is Landis, but they do not operate in PA.
I would focus on properties that are livable as-is but that need some cosmetic work because with your skills you will be able to do those renovations and add value.
Hey Ken,
As I’m sure everyone here has posted just keep learning and you will find things just start to click. I listened to podcasts for years and years and read many books before I finally got my first deal. Some people don’t even know about BP and can go out there and be successful in real estate and some of us need some wisdom passed down from fellow investors. Continue to learn and educate yourself and take it one small step at a time. Keep it up!
Keep at it! Plus there’s alot of smart experienced people on here that will help👍🏽
The grind can suck. Until you see the results.
if you are in real estate and taking it seriously then everything you are feeling is normal. 23 years ago this business absolutely destroyed every aspect of my life.
Best advice I can give you is to align yourself with someone in your market place that is successful. Ask them this simple question:
What can I do to help you grow your business? And then do those things for them. What you will learn from someone like that is worth the free labor you will provide for them.
Bottom line, everything you are going through, is totally normal...
I am also super new and inherited two rental with tenants so decided "why not me" so BOOM I bought two more properties and I have to admit I AM also overwhelmed but I do find there are sooo many helpful people in this industry, both locally and on bigger pockets so reach out and just continue to reach out. You CAN do it, if you are willing to flounder a bit during the process :).
Keep at it @Kenneth D. and keep pulling on the BP community for encouragement and advice. I often think of Malcom Gladwells 10,000 hrs to mastery, there is a ton to learn in RE and it’s ever changing. Many below have mentioned house hacking, and I would highly recommend that due to the low upfront costs (3.5% down) and the lower pressures associated with being able to work on and improve the house on your own time – versus bleeding cash every month during a rehab that’s not a primary residence. And you can forget about capital gains exemption, if you live in the property for two years!
- Michael Gonzales