Failure to launch, no luck so far

Failure to launch, no luck so far

Clute, TX · Member since 2016 · 15 posts · 12 votes

Hi, I'm 23 yrs old and have been trying to get started in real estate investing. But no luck. I know this wasn't going to be easy but it almost feels impossible. I finally tried to get pre qualified for a loan of about $80,000 to $90,000 or so. The loan officer that took my application finally called back and pretty much told me I can't if I don't have about $15k-$20k to put down. She said I don't make enough to support a loan of that much. I make about $2600 a month and have only my truck payment of $560 a month. She said with the loan payment i would have too much debt to income and would not qualify. She also specifically asked me if it was for myself or to rent out. I know I've heard before to not say it's an investment property. What is the best way to build capital or buy your first property? I also know a FHA loan will work but I don't have a house for myself and I don't want to be in a bind when I start my own family. I have a friend of mine who bought a house and he's renting it out and letting it pay itself off but now he can't get a loan to buy a house for himself and he makes very decent money. I really just don't want to fail. I have a pretty good feeling I can do it but the upfront capital to get started is what's mostly stopping me. Any feedback or tips would be greatly appreciated! TIA

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Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes

9y

Originally posted by @Omar Cantu:

She also specifically asked me if it was for myself or to rent out. I know I've heard before to not say it's an investment property.

First off, stop listening to those people - that's mortgage fraud. Second, I would seriously consider getting a cheaper car, since that is a big part of you not getting the loan. And finally, I'd see if you could find a cheap duplex to house hack as your first investment.

Good luck!

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Kevin Childers
Fort Smith, AR · Member since 2016 · 49 posts · 17 votes
9y
@Omar Cantu it is great that you are asking questions but it would be even better if you would follow the advice you have been given. Some of it is getting rid of the truck and some is keeping the truck but becoming creative on how you get to where you want to go.
Once you have your aha moment and you figure out your why, you'll be crystal clear on how to get there and in the process become unstoppable at achieving your goals.
0 Reply
Austin Fruechting
Investor · Kansas City, MO · Member since 2017 · 791 posts · 1k+ votes
9y
Originally posted by @Russell Noga:

You can't get rid of your truck now because you're 23 and don't know better. That will come with experience and you'll look back and laugh on what you're saying right now. You want to be rich and have income producing assets? Or do you want a job your entire life? Big boy decisions now, ditch the truck. You want great advice but you're not willing to act on it if it doesn't fit your lifestyle choices.
Get rid of the truck, get a second job, raise your income. Your 23, now is the time to be working your butt off. Start making responsible decisions now and you could be very wealthy at 33. THEN you can buy any truck you want.
One post, 51 likes and deserved! Well said Russell.
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Omar, come on man! Don't f-ing complain about not being able to get into real estate when you've made the decisions you've made that prohibit you from getting into real estate and refuse to go back on them. Own your decisions! Your decision and desire for the truck clearly trumps your desire to be in real estate. Own it! Until you realize you are 100% responsible for your decisions and actions there's no hope.
I reached financial freedom at 32 after starting in REI at age 25. I had 107 rental units when I reached that point. My ownership equated to 70 rental units and I was driving a Jetta with ~190k miles on it and had a work truck with just over 200k miles on it. I loved the Cadillac CTS-V coupe when it came out and could have technically afforded it, but my priority was to put money into real estate, not a car. After I had hit financial freedom I finally got a new truck this year. My new truck equates to approximately 3% of net worth. What does your $45k tuck represent of your net worth?
.
OWN
YOUR
DECISIONS
3 Reply
Maricela Chavez
Real Estate Agent · Tucker, GA · Member since 2016 · 90 posts · 144 votes
9y
You could be Paying 560 on a mortgage. You said you didn't want to tie yourself down to a property (usually an appreciating asset) but you will continue paying for a car ( a depreciating asset). I bought my first property when I was 19. Then my second property when I was 24. I occupied the place for 5 years. I moved out and rented it. Bought another house. Sold it at a profit. Still have the rental that I collect 1600 dollars a Month on. Mortgage is 1200. It will be paid off in about 3 years. My advice is buy something. Start somewhere. Real estate is not a get rich quick scheme. It's not for the weak hearted. It's not easy. But if you have a passion for it, you can seriously have financial freedom. I know the heart wants what it wants. I used to have a 980 dollar payment on a BMW. When I look back at that I laugh! So keep learning. Keep trying. But the old phrase is true. It takes money to make money.
2 Reply
Austin Fruechting
Investor · Kansas City, MO · Member since 2017 · 791 posts · 1k+ votes
9y
Adding in: You can either make excuses, or make progress. I don't believe you'll ever find a successful investor or entrepreneur that allows themselves the luxury of excuses. (this all fits in with taking 100% responsibility for yourself and your decisions)
0 Reply
Andrey Y.
Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Jack B.:

Motivation:
I'm a millionaire and I drive a 13 year old car with a lot of miles, dents all over and no working air conditioning, no power door locks, windows, etc....
I can buy a Bentley, Ferrari AND a Lamborghini, paid with cash...
All because I drive cars worth a fraction of that of my tenants and make better financial choices.
A millionaire who just hordes their money as numbers on a screen.. not something to strive for. Digits on a screen and paper doesn't do it for me. Might as well be broke.
Someone who spends their money on experiences or gives to others.. now we are talking.
0 Reply
Derek Perez
Greeley, CO · Member since 2017 · 9 posts · 6 votes
9y
Just wanted to give words of encouragement from someone who is in a similar position. I'm three years older, and my ability to grow my capital as quick as I wanted was hindered by my truck payment. I loved my truck, I was proud of my truck, but at the end of my day, it was getting in my way. So I sold it, purchased a 3k beater (it's not actually that bad) and now I'm able to put the truck payment straight to savings. I'm a tall guy and passionately dislike driving this old small car, however I also like that feeling. It keeps me humble, makes me even hungrier, and let's me save even more money. From someone who can relate, I know it sucks. But once you turn your WANT of investing in real estate to a NEED, you'll realize what needs to be done. Best of luck my friend.
2 Reply
Jack B.
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Andrey Y.:
Originally posted by @Jack B.:

Motivation:
I'm a millionaire and I drive a 13 year old car with a lot of miles, dents all over and no working air conditioning, no power door locks, windows, etc....
I can buy a Bentley, Ferrari AND a Lamborghini, paid with cash...
All because I drive cars worth a fraction of that of my tenants and make better financial choices.
A millionaire who just hordes their money as numbers on a screen.. not something to strive for. Digits on a screen and paper doesn't do it for me. Might as well be broke.
Someone who spends their money on experiences or gives to others.. now we are talking.
Are you a millionaire? Did I say I hoard my money on a screen? Where on EARTH did you get THAT from??? Are you sober???
The point was that he can elect to let go of the truck and invest to become rich like I did and be able to afford those things, or be broke and have a nice truck for now. Judging by your post and personal attack, I'd say you didn't get this simple concept and are not a millionaire...People don't become millionaires buying luxury cars Chief....
And not everybody cares about luxury cars. I prefer having freedom over driving a 500K car...
0 Reply
Adam M.
Rental Property Investor · Fort Collins, CO · Member since 2008 · 168 posts · 105 votes
9y
@Omar Cantu Dude, dump the truck! That's a frickin house payment.
Buy a beater in CA$H for $2000. All of the rich landlords that I know roll around cheap cars....you don't want to roll up to your properties in a $50K vehicle, they'll think you're made of money.
1 Reply
Andrey Y.
Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Jack B.:

Originally posted by @Andrey Y.:

Originally posted by @Jack B.:
Motivation:
I'm a millionaire and I drive a 13 year old car with a lot of miles, dents all over and no working air conditioning, no power door locks, windows, etc....
I can buy a Bentley, Ferrari AND a Lamborghini, paid with cash...
All because I drive cars worth a fraction of that of my tenants and make better financial choices.
A millionaire who just hordes their money as numbers on a screen.. not something to strive for. Digits on a screen and paper doesn't do it for me. Might as well be broke.
Someone who spends their money on experiences or gives to others.. now we are talking.
Are you a millionaire? Did I say I hoard my money on a screen? Where on EARTH did you get THAT from??? Are you sober???
The point was that he can elect to let go of the truck and invest to become rich like I did and be able to afford those things, or be broke and have a nice truck for now. Judging by your post and personal attack, I'd say you didn't get this simple concept and are not a millionaire...People don't become millionaires buying luxury cars Chief....
And not everybody cares about luxury cars. I prefer having freedom over driving a 500K car...
I am accredited. I have 2 inexpensive cars. I needed the AWD for the 8 months of winter in Alaska. I do drive a Lexus, but its an '06 ... people think its a few years old because of how its held up ;) However, plenty of people buy luxury cars WHILE becoming a millionaire, bud.
I wasn't talking specifically about you if you reread my post. But it appears that I struck a nerve, so maybe it hit close to home? It was merely an opinion. Simply telling people that you CAN afford this and that, but you don't go out and actually get it.. means you are hoarding money. Hence your reaction to my post. Go out and live a little.
0 Reply
Kerryanne Henry
Union, NJ · Member since 2016 · 49 posts · 29 votes
9y
Im not sure if anyone has mentioned this already but...ditch the truck :)
On a serious note, it sounds like getting some more education about preparing yourself to invest is your best bet. Because we can tell you to ditch the truck a million times but thats ultimately your decision. I think if you had better understanding of the preparation it takes to dive into REI the truck thing would be obvious. Check out the BP bookstore and resources and really do your research/due diligence and save as much as possible then try again. Good luck!
0 Reply
Austin Fruechting
Investor · Kansas City, MO · Member since 2017 · 791 posts · 1k+ votes
9y
Here's a good analogy for your truck:
Me: "Man, I've had no luck getting my six-pack to show and really want abs"
Also Me: (reaches for another slice of pizza and grabs another craft beer for the 5th night that week)
Friend 1: "Maybe you shouldn't be eating pizza and drinking beer if you truly want a six pack."
Me: "But I really like my pizza and beer 5 nights a week, and I have to eat something... so how do I get six pack abs?"
Friend 2: "Dude???????..."
.
It's clear to see my desire for pizza and craft beer exceeds my desire for the six pack. I may want a six pack, but clearly I want the pizza and beer.
If I own that decision, I'll be much more content realizing that I desire and am actively choosing the pizza/beer over the abs... or when I truly decide I want the six-pack more than the food and beer, it won't be a sacrifice to give that stuff up.
1 Reply
Victor N.
Investor · Wellington, KS · Member since 2016 · 256 posts · 188 votes
9y
I agree with the overwhelming majority of the responses; if you want financial freedom and to be an investor, sell that truck and put the equity to work. My approach to needing reliable transportation to drive about 40,000 miles between our two drivers is I own 6 paid for vehicles. We own a 2011 Chevrolet Impala, a 2006 Honda Civic, a 1994 Ford Ranger (work truck for rentals & rehab), 1986 Ford Bronco (yes a bit of my toy) and a 1986 Ford 1 ton box truck (also REI truck). I only carry full coverage on the Impala. My wife and I have W2 jobs we need at this point with commuting requirements. If one of my vehicles won't start or is down for maintenance, no problem, jump in another. I achieved this redundancy with 3 vehicles on my own. I paid no more than $20,000 cash for all 6 vehicles spread out over years and using savings every month. Just saying.
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Anthony Rodriguez
Specialist · St Petersburg, FL · Member since 2017 · 62 posts · 34 votes
9y
I personally had an amazing truck, 2015 Tayota Tocoma -TRD Sport -double cab -long bed -dark grey, I spent three years searching for my baby. Payments were $500 and it hurt every month, but felt so right when I drove it. Last summer my wife borrowed my truck and wrecked it. Her fault...
The truck was totaled. It didn't have 20,000 miles on it. A piece of me died that day, my wife was okay, but my heart ached for weeks. I thought, the truck meant everything. But insurance paid the truck loan off, and, The insurance sent a fat check sent to my house. Of course I was mad at my wife but I got over it, more trucks will come.
Not having the $500 helped me this past year eleminate some debts. I'm debt free minus my current house.
Take the truck and make money off of it. Craigslist, Uber, whatever. Try to get the truck to pay for itself.
As far as wanting to start a family, wait until you're 30. Almost all of my friends who got married in thier 20s ended up hating it. Wait until your 30s!
House Hack a duplex/ quadplex and turn your truck into a money maker.
0 Reply
Jack B.
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Andrey Y.:
Originally posted by @Jack B.:

Originally posted by @Andrey Y.:

Originally posted by @Jack B.:
Motivation:
I'm a millionaire and I drive a 13 year old car with a lot of miles, dents all over and no working air conditioning, no power door locks, windows, etc....
I can buy a Bentley, Ferrari AND a Lamborghini, paid with cash...
All because I drive cars worth a fraction of that of my tenants and make better financial choices.
A millionaire who just hordes their money as numbers on a screen.. not something to strive for. Digits on a screen and paper doesn't do it for me. Might as well be broke.
Someone who spends their money on experiences or gives to others.. now we are talking.
Are you a millionaire? Did I say I hoard my money on a screen? Where on EARTH did you get THAT from??? Are you sober???
The point was that he can elect to let go of the truck and invest to become rich like I did and be able to afford those things, or be broke and have a nice truck for now. Judging by your post and personal attack, I'd say you didn't get this simple concept and are not a millionaire...People don't become millionaires buying luxury cars Chief....
And not everybody cares about luxury cars. I prefer having freedom over driving a 500K car...
I am accredited. I have 2 inexpensive cars. I needed the AWD for the 8 months of winter in Alaska. I do drive a Lexus, but its an '06 ... people think its a few years old because of how its held up ;) However, plenty of people buy luxury cars WHILE becoming a millionaire, bud.
I wasn't talking specifically about you if you reread my post. But it appears that I struck a nerve, so maybe it hit close to home? It was merely an opinion. Simply telling people that you CAN afford this and that, but you don't go out and actually get it.. means you are hoarding money. Hence your reaction to my post. Go out and live a little.
You seem to think you can read minds. As I noted in my post, it's motivation; I have the money to buy fancy cars, but don't and invest in real estate. LET GO OF THE TRUCK. You can invest that money and make enough money to buy much nicer if you so choose, but the way to get there is to sacrifice now...I think the average person can read and understand that.
I'd hardly call a truck and a Lexus fancy cars brother...For a guy who talks like anyone who doesn't blow their money on Lambo's is a loser in response to my post, you sure seem to lack any fancy stuff yourself. And what did you expect with your comment like that, quoting my comment? Are you tone deaf?? The guy doesn't have the money to pay for the truck even, let alone Lambo's, or did you not get that? The point is to help him manage his money smarter so he can if he so chooses.
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Harrison Liu
Investor · Seattle, WA · Member since 2016 · 143 posts · 68 votes
9y
Has the truck been sold? lol. Have you noticed that Omar has stopped posting since he made up his mind? it's pointless and waste of time to continue posting on this thread. @Jack B. a car without air conditioning? seriously? come on you need to spend some money to enjoy life. otherwise what is the point of making all these money? I am a millionaire btw there are lots of millionaires on the coast so it's not a big deal as it used to be. I drive a 2004 sienna van. it's old but in very good shape and it has air conditioning! I would trade in a Tesla someday it that car breaks down. The only reason I am keeping it today is because it runs great, not because I try to save money to invest in real estate. once you have arrived you can have your cake and eat it too. that's the whole reason why I started this rei journey 17 years ago.
0 Reply
Carlo Anello
Lees Summit, MO · Member since 2017 · 1 post · 0 votes
9y
Speaking for myself, I am 21. I live at home with my parents and own my car outright. I work 55 hours a week, make about the same a month as you do. I have saved 27k in less than a year. What I am finding out is the first step is definitely difficult without help. I have read all of turners books and have devised a plan using his Rental Guide book. I recommend keep reading, but also understanding money isn't your biggest issue right now. I have money, yet I still have the same things going on. The plan will get you further, as well as your sacrifice. Your success will revolve around your sacrifice and plan. Period. Good luck to you!
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Bart H.
Dallas, TX · Member since 2016 · 1k+ posts · 745 votes
9y
Originally posted by @Andrey Y.:

Originally posted by @Bill Goodland:
In order to have what others don't have, you have to be to do what others won't do. Do you realize that over 20% of your income is going towards a truck payment?! I'm sorry but that is insane. Not sure if you need a truck for work, but I would sell the thing and buy a 10 year old used one for like 3-5k. Before getting and keeping business finances in check(yes even a house hack is a business) you need to be able to keep your personal finances in check.
If you don't like what this mortgage broker has to say, I'm sure there's 20 others in your area that would love your business. Get out and network. For someone who's wants to build wealth through real estate at a young age, I see no reason why an FHA house hack can't be an option. I wish you the best of luck and feel free to reach out anytime.
There is no such thing as a reliable used TRUCK for 3-5k. Thats a pipe dream. More like 8-10k and even then you'll have minor repairs.
My wife's 2004 Honda Pilot KBB value is about $3,800. Its just fine in terms of reliability, and heck of a lot cheaper than the 10-20%/year he is losing in depreciation plus the cost of the interest, insurance and payments on his $40K truck.
0 Reply
Andrey Y.
Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Bart H.:

Originally posted by @Andrey Y.:
Originally posted by @Bill Goodland:

In order to have what others don't have, you have to be to do what others won't do. Do you realize that over 20% of your income is going towards a truck payment?! I'm sorry but that is insane. Not sure if you need a truck for work, but I would sell the thing and buy a 10 year old used one for like 3-5k. Before getting and keeping business finances in check(yes even a house hack is a business) you need to be able to keep your personal finances in check.
If you don't like what this mortgage broker has to say, I'm sure there's 20 others in your area that would love your business. Get out and network. For someone who's wants to build wealth through real estate at a young age, I see no reason why an FHA house hack can't be an option. I wish you the best of luck and feel free to reach out anytime.
There is no such thing as a reliable used TRUCK for 3-5k. Thats a pipe dream. More like 8-10k and even then you'll have minor repairs.
My wife's 2004 Honda Pilot KBB value is about $3,800. Its just fine in terms of reliability, and heck of a lot cheaper than the 10-20%/year he is losing in depreciation plus the cost of the interest, insurance and payments on his $40K truck.
Fair enough.. can a Honda Pilot tow anything? Sort of defeats the purpose of getting a truck :P I would just get a station wagon or small SUV at that point.
0 Reply
Jieh Larson
Investor · Houston, TX · Member since 2016 · 80 posts · 38 votes
9y
Originally posted by @Omar Cantu:

@Camron Cottam
2016 Silverado Z71 4x4 pearl white
Looking good! All it's missing is your business logo on the side and a hot shot trailer behind it. Put that thing to work and you can turn it into an asset, make money to cover your costs and do it all with pre-tax dollars.
0 Reply
Clem Singleton
Arlington, TX · Member since 2016 · 6 posts · 1 vote
9y
Hi Omar, I am a former Realtor from Dallas. The scenario you described was destined to "fail to launch". There are Hard Money lenders that specifically lend money for Real Estate investing. It appears from your post that you were only trying to apply for a loan; however you have to think much broader than that. If you want to invest in Real Estate you have to decide "how" you want to invest. Are you going to fix and flip properties for profit? are you going to Buy and Hold for Rental? What would be your exit strategy for the property?
If you are wanting to Invest in Real Estate, you should research HARD MONEY Lenders and make another go of it. As I said before, I was a former Realtor and I've seen so much stuff happening that shouldn't be, and it pains me to see young people trying to make a better life for themselves and not getting good information. Since you're a Bigger Pockets, just "SEARCH" HARD MONEY LENDERS and sit down and talk with them. You'll probably be glad that you did
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Victor S.
WorldWide · Member since 2016 · 1k+ posts · 1k+ votes
9y
Originally posted by @Clem Singleton:

Hi Omar, I am a former Realtor from Dallas. The scenario you described was destined to "fail to launch". There are Hard Money lenders that specifically lend money for Real Estate investing. It appears from your post that you were only trying to apply for a loan; however you have to think much broader than that. If you want to invest in Real Estate you have to decide "how" you want to invest. Are you going to fix and flip properties for profit? are you going to Buy and Hold for Rental? What would be your exit strategy for the property?
If you are wanting to Invest in Real Estate, you should research HARD MONEY Lenders and make another go of it. As I said before, I was a former Realtor and I've seen so much stuff happening that shouldn't be, and it pains me to see young people trying to make a better life for themselves and not getting good information. Since you're a Bigger Pockets, just "SEARCH" HARD MONEY LENDERS and sit down and talk with them. You'll probably be glad that you did
HML guy: "Sell the truck first, then we'll talk."
0 Reply
Jamie Heath
Rental Property Investor · Camillus, NY · Member since 2013 · 28 posts · 14 votes
9y
Hi Omar. Just to put it in perspective, I recently closed on a SFR that I purchased for $37.000 ( less than the cost of your truck...lol). I put 18,000 into it and it now appraises for 68.000. I was able to use all cash for the deal from savings. I'm holding it for the excellent monthly cash-flow it will bring. I STRONGLY suggest reading "Rich Dad, Poor Dad". Please read that book if you haven't already.....Good luck, my friend!
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