I finally had an investment mature and now I have pulled the cash out of it and I am ready to look at my first deal. I am at that point in the webinars where I feel like I am ready to jump off that cliff @Brandon Turner , but standing at the edge and looking at how far I can fall. 6 webinars behind me, number 7 tonight, and countless sleepless nights reading, searching, and visualizing the first steps. Needless to say I am more nervous than I thought I would be.
I keep questioning myself and my plan, where should I start just keeps running through my mind. I know what I want to do, just have to do it. I guess I need that final push so I am forced to pull the cord on that parachute and land where I want to be.
I will probably go Pro tonight so I have unlimited access to the deal calcs, need that discount! I guess I am just whining out loud and looking for the go get it! inspiration.
Does anyone want to share with me on this thread how they felt right before they jumped and what first steps they took once they had the cash on hand to get real with their real estate investing? I am sure this has been done on this site many many times before, but it's a whole different animal when it is you that is finally getting ready to go for it.
Well I will share my re-entry. Almost 20 years ago on a new construct I lost nearly 6 figures due to a "perfect storm" of overbuilding, inadequate local market knowledge, internal and external forces (building for myself, not considering the effect of a huge subdivision dump, etc). If you include the opportunity losses, including the lost increases on appreciation, that loss today translates to about a quarter million. That's a hard sum to swallow and the initial loss chased me for about a decade.
So when I went back in, of course it was a little nerve-wracking. The difference was two-fold: first, I had lost, and lost big, before and was not homeless or any skinnier (much to my chagrin!). Second, if I got hit with a second "perfect storm", I could afford to lose what I was pumping back into REI. I didn't want to lose it, but if things had gone totally south it wouldn't have been the end of the world.
How I approached my re-entry was pulling out my George Costanza and doing the opposite of what I had done the first time around. First and foremost, go into it as strictly business. No personal connections, no overbuilding, no emotional ties to the land, real estate, rehab, whatever. Next, get dirty and get the numbers. The real numbers, not the "hope-for" numbers. Be hard on yourself and look at worst-case scenario numbers for what you will spend. Understand your exit strategy - how you will recover most/all/more than your investment if you decide it's not for you. Get a real education on the costs of doing business. On this front I was covered, having been involved in RE for many years, but the "updated" costs of contractors, closing fees, etc was still things I had to pick up. Finally, make up your mind to do it. If you leave yourself an out, you either really don't want to invest in RE or you are so bent on a "sure thing" that you are hesitant to the point of doing nothing (i.e. "analysis paralysis). Guess what? There's no sure thing. You could buy a piece of real estate and be completely decimated. However, if you really do your groundwork, you can minimize that likelihood to such a small level as to make it virtually non-existent. Admit to yourself that it's entirely possible that you'll lose your *** on this, and if it happens what the fallout will be, and then you can get past that fear and move forward.
Also, don't mistake emotion for action. Being excited about real estate is not the same thing as putting in time learning the business. Enthusiasm is not a substitute for knowledge when you are the one putting in the cash.
Good luck! No one who's ever spent their first 10 or 20 grand hasn't been in the same jittery shoes.
Thanks for taking the time to write back.
Remember the first time you learn to drive, rode a bike etc. It gets easier.
Same thing with REI. Keep educating yourself. Like @JD Martin says, it's all business and about the numbers. It gets tough not to be emotional about it as it's your money. It's probably the biggest purchase of your life, and there're no guarantees it's going to work.
You will make mistakes like all of us do. Minimize them by surrounding yourself with good people. Set up a support system, and utilize BP as much as you can.
Finally, enjoy the process.
@Chris T. Yes this is definitely the place to get the proper guidance. That was the main reason I felt comfortable sharing my nerves with this community. It seems like the best support system for those that are going to finally get serious about real estate. I feel like I can't read enough or research enough and pound on my old-school calculator. It's like my fingers are on auto-pilot. Sometimes I look down and don't even remember picking up the calculator in the first place and then I notice I have 7 open real estate site tabs on my monitor.
Next thing you want to do - if you haven't yet. Go to your local REI, meet people and state your goals.
This will make you accountable to them and vice versa. Reach out to active BP members in your area, and have coffee.
And do it consistently. Don't go for 2-3 meetings, then go MIA for 6 months. This is a slow process. Keep learning and networking.
There are A LOT of investors not on BP. But once you start doing deals, it gives you credibility and your network will grow beyond BP.
Already a lot of good advice given by other BP members.
Robert Kiyosaki said something in a podcast that stuck with me. He said, you are guaranteed to fail. But, you must fail fast enough and a number of times to know what success is. Learn from those failures.
Every BP member that has invested in real estate has, at one point, felt like they failed. Whether it was evicting a problem tenant, investing in a bad deal, or losing out on a great one - there will be days in REI you will feel like you're losing. Always reverse that thinking. See it as a great learning experience, research and implement systems that will mitigate those problems in the future, rinse and repeat.
There are a lot of people who talk about going into REI that are all theory and no action. Congrats on taking action!
@Radley Estrada yes! I believe in learning from failures. Failures can definitely be great experiences for long term thinking / investing. I am at that point where I want to succeed just enough so I can stay in the game to out-last the failures that come before succeeding.
@JD Martin posted some great advice along with others who encouraged you to get out network with people. Everyone gets nervous, especially when you are doing your first deals. Take the emotion out as others have said, run the numbers, don't purchase just to get a deal done. And for me my biggest lesson, plan out your exit strategies. Can you flip it, rent it and cash flow or something else it things go south. Good luck!
Just keep making offers until one sticks
Made my first offer. It seemed like I came to the table strong. In the end I had to walk away from it. The seller just wanted too much for the house to make the numbers work for me. If not for the education I have received from BP and the use of the analysis tools, I probably would have originally offered more than the seller's counter offer to begin with thus paying way to much for the house.
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