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.
Funding for me. I have around 4,000 but seems like hard money lenders still don't want to talk. There's a bunch of multi family units for sale around me, but again, funding
raising money.
Attend your local REIA. Show you are serious and I am sure someone will fund you. Its all about the relationship. I have done many flips and never used a bank.
Send a hand written letter to the owner stating you would like to buy their house @Raven Walker. Make sure to include your contact information within the letter.
Hope that helps
Fear, lack of experienced contacts in our area, lack of money (for a short time longer). We are nearly at a point where we will be able to borrow against our residence so we can add some skin to the game, but would love to find someone with experience to go in partners with... someone who could show us the ropes on a few rehabs. We're in the Sebring, FL area but mostly I retested in and around Tampa & Clearwater areas.
I don't have enough credit history to get pre approved for a loan. Very frustrated since I have about 25k saved up for down payment +small renovations.
I keep questioning myself, "am I ready to take the first step and invest in my first property?" What is one ready to take that first step?
I dove into the rental RE market as a naive 20-something 8 years ago and now have 4 duplexes and two condos. I'm trying to figure out where to go from here now that I have more cash flow and capital (from my day job) and realize that some of the rentals I bought aren't ideal (low cap rates, negative cash flow in some cases). Should I sell and shift to better rentals now that I know how to analyze RE better? Or hold for the equity build up even if cash flow is weak due to high transaction costs?
Originally posted by @Elizabeth Grahsl:
I dove into the rental RE market as a naive 20-something 8 years ago and now have 4 duplexes and two condos. I'm trying to figure out where to go from here now that I have more cash flow and capital (from my day job) and realize that some of the rentals I bought aren't ideal (low cap rates, negative cash flow in some cases). Should I sell and shift to better rentals now that I know how to analyze RE better? Or hold for the equity build up even if cash flow is weak due to high transaction costs?
If you think rentals are not "ideal" because of cap rates you should educate yourself more on real estate metrics before you do anything.
Can't seem to win on offers. I've been using the ARV formula and making offers.
Sterling White I have been trying to get into this business for 6 months. (Wholesaling) It's been hard to find the right mentor and the right people for insight. A lot of people talk like they do deals but are lost and still trying to figure it out. Here in Phoenix there are a lot of newbies that have bought the "system" but have not done much with it. I finally talked to an friend of mine that got into the business and he said you "just gotta have the balls to do it." I knew some of the numbers that the direct mail mentors were using/creating and so I created some online presence and used the search engines to help me create leads. So far it's only been one week and I have had 27 leads, 6 appointments and got my first contract yesterday! Now just have to find a buyer. (Know anyone or where I can post it?) I really think it's about learning and executing what you think is best for you. I am just starting out so not sure where this is going to go but I am going to do what I have to to sell this deal and get another. I'll keep you posted.
@Sterling White. We believe borrowers have a harder time financing rental properties because lenders out there look at their personal income rather the income from the property. I would like to get your view on alternative ways investors find to finance their properties and get your general view on this topic. Thank you
Originally posted by @Armen Zakarian:
I keep questioning myself, "am I ready to take the first step and invest in my first property?" What is one ready to take that first step?
Stop questioning and take the step. If you keep questioning the next thing you know it will be 2 years later and you're still questioning. Get it over with, if you fall get back up, chalk it up as a learning experience and move on.
I think whats stopping me is that I'm trying to figure out what that proper "first steps" is, besides the educational aspect or should I say analysis paralysis.
Who's information have you read so far?
@Account Closed:
George, feel free to contact me. I'd be interested in what you have to offer.
@michael
I have read read the books by J Scott, The Book on Flipping Houses and also The Book on Estimating Rehab Costs. I just recently read the book written by Armando Montelongo, Flip and Grow Rich. I also listen to one Bigger Pockets podcast daily. I just started a new read, off the topic of real estate called The 4-Hour Work Week. I also attend the weekly webinars on The Bigger Pocket.
Rob McGahen bahahahahahh I'm dying over here..."my wife" haha 😂😂😂
What's holding me back is just time and money.
Whatsholding me is money and we are looking the houses on the internet since we ar in South Africa which makes it difficult
@Armen Zacharian
Try this. Go onto Craigslist to the real estate part under house for sale and pretend to be a buyer. Many of the low priced houses for sale on Craigslist are wholesalers. Contact the person listed as the seller and ask them buyer questions. Is there an Ernest money deposit? Is it refundable or none refundable? Is this the least you will take for the property? What is the rent in that area (If not Listed)? How did you get your comps? Is that a final price or is it negotiable? It doesn't matter what the questions are at this point, what's important is that you are taking action. Do this exercise 3 times a day for 3 days. It will help you to get out of the analysis paralysis mode by taking action steps. This will also give you an idea of what some of the answers will be to those questions. The worst thing that could happen is you actually get in touch with the real homeowner, which won't be so bad. Take small steps, but most importantly stop second guesting and take them. You goal should be to reach 5 failures as soon as possible. That's five lesson that will improve your business. I've had 5 failed businesses and going all out for this sixth one, but I have learned so much from each failure. Take Action NOW!
Originally posted by @Armen Zakarian:
Try this. Go onto Craigslist to the real estate part under house for sale and pretend to be a buyer. Many of the low priced houses for sale on Craigslist are wholesalers. Contact the person listed as the seller and ask them buyer questions. Is there an Ernest money deposit? Is it refundable or none refundable? Is this the least you will take for the property? What is the rent in that area (If not Listed)? How did you get your comps? Is that a final price or is it negotiable? It doesn't matter what the questions are at this point, what's important is that you are taking action. Do this exercise 3 times a day for 3 days. It will help you to get out of the analysis paralysis mode by taking action steps. This will also give you an idea of what some of the answers will be to those questions. The worst thing that could happen is you actually get in touch with the real homeowner, which won't be so bad. Take small steps, but most importantly stop second guesting and take them. You goal should be to reach 5 failures as soon as possible. That's five lesson that will improve your business. I've had 5 failed businesses and going all out for this sixth one, but I have learned so much from each failure. Take Action NOW!
Thanks for the great info. I am going to start putting this in action!!
Sacrifice got my husband and I the cash for the first down payment. We went to Wells Fargo in 2011 and were told 15% down, then went back when we had it and were told 20% down, then went back a third time and were told 25% down. We eventually found a lender that would work with us with cash down and very little experience. We moved out of our 1100 square foot condo with absolutely no maintenance and into a tiny 400 square foot apartment and storage locker. We lived like college kids again and put away the 25% down. We purchased our first 4-plex in 2013 and house hacked it. Moving in after the 400 square foot apartment made us feel like a king and queen!
I think sacrifice is key to getting what you want. Once you trim the fat off of the typical north American life you can reach your goals much more quickly. Honestly, will you really miss that DirecTV account if you get rid of it? Do you really need to upgrade your phone every year? Do you really need a new car? This goes to all of us who have bought into the lifestyle, thereby making someone else rich instead of making ourselves rich.
Remember, the house always wins! In RE, you are the house- as long as you purchased well!
Most new investors that I meet are only being stopped by themselves. When they get out of their own way and learn to focus on getting deals done, they look back and find that anything they thought was in their way really wasn't.
Great question @George Despotopoulos. With the little context you have given me here's my reply:
Investors can raise money by tapping into their inner circle i.e. friends, family, colleagues, former work associates. They have to treat those people's money as if it was their own.