What is stopping you from making your first deal?
Hi Everyone, I am looking for obstacles that are holding investors back from accomplishing their first deal. Leave some comments below and I will do my best to offer insight. -Thanks for your input Sterling.
Other experienced investors are more than welcome to chime in as well.
Let me offer some insight on all those in need of funding: Get good at finding deals, the rest will happen naturally. Private lenders and private equity partners like me are everywhere and just looking for deals to fund. Find the deal, shop the deal, and the funds will find you, but you have to hustle. This is what separates the wannabe's from the real deal investors. Good luck. Happy investing and let me know if I can help.
Getting the money for the down payment and finding the financing. It seems like a big obstacle right now. Also finding the good deal so I don't lose money. I feel like I also suffer from paralysis by analysis. Thank you for putting this thread together.
Direct mail sent ,add posted on craigslist, waiting for that phone call. Meanwhile i'm trying to get a pre-approval letter or a proof of funding,trying to get ready before that phone rings.
Man..Waiting for that first deal is killing me, but gotta start somewhere,don't I
I've got an inspection contingency so I can walk away if the seller doesn't either fix or renegotiate. I'd prefer the seller to recognize I'm taking his entire portfolio in one deal, saving him time and money and to realize that it's a business deal, not a personal, emotional transaction.
As Armando said, sellers (at least in my market) are asking B/C prices for C/D areas/properties.
#5 Wholesaling Contributor
- Real Estate Broker
- Naples, FL
Obstacles within one's own mind. That is the most common reason. When you ask someone why they don't try something, they almost always have barriers they put up themselves. If you have a legitimate obstacle, find a way to get around it. Example: funding. The bank says "no". So, you find a friend or family member that says "yes". An excellent read on escaping your own fears is "Illusions" by Richard Bach. It makes a great gift as well.
Making a RE transaction involves relatively BIG DOLLAR AMOUNTS and that was very intimidating for me. I thought of the first deal like going to the casino and bypassing the $5 blackjack table and taking a seat the $200,000 blackjack table. That was the cause of my paralysis analysis. I got over it when I realized that it wasn't a win/lose situation like a hand of blackjack, but that it would be a learning experience and I would pick up skill as I went along.
Money to start. I have the time to be involved in a buy and hold or a flip. I'm in Toronto, ON.
If anyone would like to partner with me, I would be the work horse.
I had "new shiny toy" syndrome...was listening to different podcasts and then would get excited about flipping or multifamily or etc. I also would read the books recommended by the different podcasts and that led me down different roads as well. Lastly, I have had a few concerns about the ethics and morals behind wholesaling; not sure if it's the right thing to do.
In spite of all that, I have sent out 3 mailing campaigns and have gotten 3 calls but not deals. It could be that I need to work from a different list and find better leads. Currently I am driving for dollars and looking for ugly houses in good neighborhoods and sending them a letter. I was using the absentee owner with high equity list and got a few tire kickers.
One thing for me is the resources. It's so important to have the right people on your team when you are starting out. Real Estate investing is very popular and contractors know their services are needed. Sometimes, they can really up their price and take advantage of newbies. I need to have people on my team who I can trust, lawyers, contractors, realtors, financing, etc. If I can get the right people on my team, it gives me confidence going forward. I am in Chicago but I want to invest in Indiana as well. Having a network of legit people can help make that happen.
Right now I'm just digging for the right way to acquire my first property. I attended a default tax auction last week but most/all of he properties were in neighborhoods that would not warrant a flip. Houses sold for 5-18k and there were many that were passed up. I'm really interested I. Other options for finding low cost homes (25-35k) that can be improved for about 20 and then sold for 60k. Seems reasonable and I'm pretty sure their out their in my area, but I just need to find them.
You hit the nail on the head @Ram Gonzales. Thank you for the input.
Great to hear you made it past your fear @Paul Winka.
You're in a perfect position with time on your side @Lorenzo Cabason. The first buy & hold property I acquired I hustled using my TIME and brought the deal to my partner who funded it. Zero money came out of my pocket. Don't let money hold you back.
You're on the right track @Michael Nicholson in my market you have to hit the same list 2-3 times to see real results. The driving for dollars is a good strategy as well.
Biggerpockets.com is a great way to find the people you're looking for Earl. You have to get yourself out there.
Are you attending local real estate meetups @Nathan Johnson? Maybe able to find someone at those events who is in the same niche that can offer some more insight.
@Sterling White I found that that it all comes down to one thing. What was ultimately stopping me...was myself. Needed to overcome all the questions and doubts in my own mind...
Ram Gonzales I think you lit a fire. I'm gonna try and get 100% financing and see where it goes from there.
My team and I are wholesalers and were fairly new, we are trying to figure out the best marketing strategy.. With a $300 budget. Options are bandit signs and spend the time putting them out and picking them back up, or investing in a lead list and outsourcing the direct mail? If a lead list is your suggestion, which lead list source has the highest success rate? Thanks, @Sterling White
one of the main things is finding what properties to send direct mail to. Like if it's vacant obviously no one is at the house. And I know houses that are owned by banks are not an option for wholesaling. I pretty much need help in finding where to market
I don't know where to start... I want it so bad I can taste it but just trying to find my way on where to start. Thinking maybe finding a mentor to shadow will be helpful. But I've had a hard time finding one.
money and a lender that will take a chance on a first time investor.
Finding a deal with a big enough spread. We just started our mailing campaign so hopefully we will have better luck. I have had cash in hand for 8 months searching for a deal. Wife is on board and we are ready to go. Just gotta find an actual deal...
That is deep @Allen Seto but is true yet for many others looking to break into the industry. At the end of the day we only have so much time on this earth so why not go for it? That thought has always helped me.
I do not personally use lead lists, @Margaret A. Mann. Driving for dollars to find destressed properties is highly effective as well as sending letters to absentee owners.
Properties that are vacant or need work is a good start @Raven Walker. I also avoid sending letters to banks. Have you done any marketing campaigns previously, Raven?
Are you attending local real estate meetups, @Terrell Hurston. Get out there and network with other like-minded individuals in your market. You may run into someone to potentially shadow behind.
Is this your first marketing campaign, @Josh Anders? If so you should be able to get a good deal depending on how much marketing you sent out. May have to hit the same list 2-3 more times to see some real results.
The idea of using debt as a tool. So basically fear into getting debt.
@Sterling White no I haven't because I'm not sure how to contact the owners
Can I answer a slightly different question?
"What is stopping me from making more deals beyond my 3 units?"
Phoenix as a region doesn't meet my Buy+Hold criteria. I'd like to focus on this one strategy until I kind of get it (thank you David Lindahl and Gary Keller). I don't know how to buy and manage rehab/repairs remotely.
Among other excuses...
Originally posted by @Steve Gunasingh:
I have $10 k saved but I have no idea where to start. I am in the military so I am constantly moving. I wish I could passively invest with someone as a partner.
Hey Steve you have a better start than most. My advice is to educate yourself as much as possible about real estate before you spend a dime of that money on anything related to real estate. That way when you do invest it you will know how to make it keep working for you.
The thing that is holding me back is "ME". It starts and ends with "ME" no matter what.
Getting started in rental properties hasn't been working out too well. Been trying to acquire a rental property for months and so far, nothing. The mortgage (found out I can't get a 30-yr, low 4% interest, 20% down mortgage unless the property is my name, not in an LLC) plus the expenses puts small multi-family units at a monthly net clear of $100-125/door and an SFR monthly net clear of $175-200, both with a 7%-8% cash on cash return. Those numbers are not acceptable.
Not sure what to do next.