Biggest Fear for Newbies

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Biggest Fear for Newbies

Jon Lee
Investor · Las Vegas, NV · Member since 2014 · 471 posts · 241 votes

Every investor no matter how experienced was a "newbie" at one time....everyone had a point where they were starting out.  

For all the NEW INVESTORS out there....what IS your biggest fear and how DO you plan to overcome it?

For all the VETERAN INVESTORS out there....what WAS your biggest fear and how DID you overcome it?

For example...when I started almost six years ago...I was terrified of not seeming "credible" as an investor until I completed my first deal.  I overcame that by committing to the process of becoming educated and scrutinizing multiple potential deals until I completed my first two flips at the same time.  Working through the process to find those first two flips in a competitive market (Las Vegas) helped me overcome the credibility anxiety.

Please share as much as you like so others can benefit from your current or past experiences.

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Bob Razler
Rental Property Investor · Boca Raton, FL · Member since 2017 · 329 posts · 237 votes
9y

Hello:

My biggest fear is that life has no intrinsic meaning or value.  That a single human or even the entire human species is insignificant, without purpose and unlikely to change in the totality of existence.  That each individual is an isolated being born into the universe, barred from knowing "why", yet compelled to invent meaning.

My second biggest fear is Jell-O.

After that, I worry most, like @Brad E. , that I make a mistake so big that it hinders my ability to move forward at the pace I desire toward my REI goals.

Bob

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  • Brad E.
    Investor · Athens, GA · Member since 2015 · 205 posts · 66 votes
    9y

    For me it has been making a mistake so big it would take me out of the game and I wouldn't be able to get back in. 

    To be honest I haven't conquered it totally, but I think recognizing and labeling it helps a lot. 

    When it hits me I just try to think logically about what I'm faced with. I know I'm my heart that even if I screwed up major I would still be able to come back from it. People do it all the time. It just might be a lot harder. But like most anything else I think it boils down to how bad you want something and what you are willing to sacrifice to get it.

    So I tell myself that, and keep on rolling...

    10Reply
  • Anthony GaydenPro Member
    Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes
    9y
    Jon Lee My biggest fear was that I wasn't going big enough to really make a difference in my financial life. While owning 8 units and my personal residence is okay, I still think I need to be much larger.
    Podcast Guest on Show #21
    5Reply
  • Bob Razler
    Rental Property Investor · Boca Raton, FL · Member since 2017 · 329 posts · 237 votes
    9y

    Hello:

    My biggest fear is that life has no intrinsic meaning or value.  That a single human or even the entire human species is insignificant, without purpose and unlikely to change in the totality of existence.  That each individual is an isolated being born into the universe, barred from knowing "why", yet compelled to invent meaning.

    My second biggest fear is Jell-O.

    After that, I worry most, like @Brad E. , that I make a mistake so big that it hinders my ability to move forward at the pace I desire toward my REI goals.

    Bob

    16Reply
  • Jon Lee
    OP
    Investor · Las Vegas, NV · Member since 2014 · 471 posts · 241 votes
    9y

    @Anthony Gayden...most people are scared that their dreams are too big and get scared by them.  I read your profile....It seems that you ONLY think BIG now!  whether it's 80 units; 800 units, 8,000 units or 80,000 units....go big or go home!

    4Reply
  • Ariel Bullinger
    Cape Canaveral, FL · Member since 2017 · 11 posts · 8 votes
    9y
    That I'm going to have to deal with terrible tenants!
    6Reply
  • Jon Lee
    OP
    Investor · Las Vegas, NV · Member since 2014 · 471 posts · 241 votes
    9y

    @Brad E. & @Bob Razler....I have found that the fear of making mistakes is what hold a lot of new investors back (along with the fear of rejection).  Creating your gameplan, setting the right models & criteria in your investing using conservative numbers is how we all stay out to trouble...even when an investment goes sideways. 

    And I LOVE Jell-O!

    6Reply
  • Jim D.
    Investor · United States · Member since 2015 · 415 posts · 487 votes
    9y

    In 2-3 years I plan on being experienced enough to ask for other people's money to invest. The thought of losing someone's hard earned money scares the bejeebers out of me. 

    To overcome the fear, I'll treat their money like it's my own and work extraordinarily hard to invest it wisely.

    12Reply
  • Terry McAllister
    North Beach, MD · Member since 2016 · 13 posts · 3 votes
    9y
    Mine at this very moment, is pulling the trigger on a property and not earning enough on the appraisal to start the BRRRR strategy. I am just heavily confused as to how you find a property that will give you enough equity to make it worth it, only lenders I can find will online finance 80% of the value. After it's all said and done, that's not that much considering the next house requires a 20% down payment and rehab costs.
    2Reply
  • Jordan B.
    Winona, MN · Member since 2016 · 26 posts · 20 votes
    9y

    I'm at a crossroads in my career, and I worry that I won't have the time to manage my business properly.  The local PMs haven't impressed me, so I need to create good systems to ensure the wheels won't fall off when I'm out of town for a couple months.

    I have to keep reminding myself, "Let's have BIG problems!".  Overextending myself is a better problem than not extending at all.

    2Reply
  • Jon Lee
    OP
    Investor · Las Vegas, NV · Member since 2014 · 471 posts · 241 votes
    9y

    @Ariel Bullinger...common fear from many buy & hold investors...proper screening is the best cure for that.  I live in Vegas so I'm familiar with what goes on here in town.  PM me and I'm happy to share from my experiences with you.  Generally proper screening + a competent property manager take a lot of the headaches away.  

    0Reply
  • Jon Lee
    OP
    Investor · Las Vegas, NV · Member since 2014 · 471 posts · 241 votes
    9y

    @Jim D....Amen brutha (and I'm not religious)!!!!  Treat the private money lenders capital like it's your own (even better).  Pay often and early!  

    All the private money in the world is out there for you to acquire as much real estate and you want!  Feel free to start working with portfolio lenders for your buy & hold properties (if the numbers make sense) to get use to financing your properties....over time the switch over to private money will be easy with your experience and a proven track record.

    2Reply
  • Jon Lee
    OP
    Investor · Las Vegas, NV · Member since 2014 · 471 posts · 241 votes
    9y

    @Terry McAllister...Not being familiar with your market; I suggest that you plug into you local investor network through the local REIA's and or investor meetup groups to see how other buy & hold investors are making it work. Honestly; the technicals of real estate are always the easiest part to learn...there are tons of blogs and forums on BP about BRRRR strategies.

    Learn from them and connect with those who are having local success.

    1Reply
  • Jon Lee
    OP
    Investor · Las Vegas, NV · Member since 2014 · 471 posts · 241 votes
    9y

    @Jordan B....great systems make everything better.  I have also learned to be a proactive as I can with my property managers in terms of setting expectations of screening tenants and the handling o f unexpected maintenance issues.

    Eventually I would like to have enough properties in one city to where I can just hire my own PM to handle only my properties...I have greater control; they have focus; & I save overhead cost.

    1Reply
  • Account Closed
    Contractor · Los Angeles, CA · Member since 2015 · 887 posts · 323 votes
    9y
    For me right now is that I don't have a whole lot of capital so one substantial size mistake would pretty much wipe me out
    5Reply
  • Samuel ChapmanPro Member
    Appraiser · Irwin, PA · Member since 2016 · 8 posts · 6 votes
    9y
    Jon Lee with a lack of experience, the biggest challenge for me is trusting my numbers. That, and overcoming the hurdle of reaching out to potential partners/sellers/mentors that do have more experience. I have found that being completely honest with people and admitting when you might not understand or be sure of something works really well. Generally people are willing to help, especially if you're honest and straight forward with them.
    4Reply
  • Jon Lee
    OP
    Investor · Las Vegas, NV · Member since 2014 · 471 posts · 241 votes
    9y

    @Account Closed...see my response to Brad E. & Bob Razler....and learn how to leverage property.  Financing properties is just leveraging someone else money, whether it's the bank's money or private funding.  

    0Reply
  • Jon Lee
    OP
    Investor · Las Vegas, NV · Member since 2014 · 471 posts · 241 votes
    9y

    AMEN @Samuel Chapman Concerning being honest about your experience....AMEN!

    Also...run mock deals to get comfortable with numbers.  Also review many case studies that you can find on BP.

    4Reply
  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y

    @Jon Lee My biggest fear is that I'd buy something that would bleed cash instead of make money.  How did I overcome it?  I paid all-cash.  It was a horrible financial decision (no mortgage interest to write off!) but it did get my wife comfortable with investing, seeing that occupancy was high, seeing that rent checks were getting delivered, seeing that we weren't getting killed by property management expenses, etc.  In short, just seeing 12 months of expectations being met really eased her (us) into making subsequent purchases.  Should we have taken out a mortgage on the first property?  Absolutely.  Was making that (sub-optimal) decision a way to overcome hesitancy and fear?  Absolutely.

    9Reply
  • Val J.
    Rental Property Investor · DFW · Member since 2015 · 89 posts · 36 votes
    9y

    I fear that I'm not doing it right. I read all of the rules on this site 1%,  2%, 50% etc. and finding them confusing  I ask myself am I doing it right? I don't like debt so I fear borrowing too much money and having the noose/burden of it around my neck. 

    3Reply
  • Iqwe Haywood
    Investor · Charlotte, NC · Member since 2017 · 27 posts · 13 votes
    9y
    My biggest fear was/is starting! But once you've done your research...read...read...read...study...study...study & attend some seminars & network! I feel as though you're already 10x more prepared than the average joe! Knowledge of systems & follow through is what separates the men from the tire kickers in sales! Real estate I'm sure is the same! ✊🏽
    2Reply
  • Jon Lee
    OP
    Investor · Las Vegas, NV · Member since 2014 · 471 posts · 241 votes
    9y

    @Andrew Johnson...as long as you stayed empowered in your decision and owned it; it's all good!  Myself though...I'm a guy who will always leverage financing strategically.

    1Reply
  • Jon Lee
    OP
    Investor · Las Vegas, NV · Member since 2014 · 471 posts · 241 votes
    9y

    @Val J....Those rules are always just guidelines.  Over time you will develop your own criteria and models that allows for you to make money in the market(s) you invest in.  The investing model you develop for yourself will empower you to be able to take action and feel comfortable in whatever investment you own/flip/or participate in.

    I would also change your perception of debt so you can see the advantages of leveraging debt for cashflowing assets.  It is understood that a person who has avoided "consumer" debt for much of their life could have a hard time making the mental shift to take on debt as a tool.

    2Reply
  • Jon Lee
    OP
    Investor · Las Vegas, NV · Member since 2014 · 471 posts · 241 votes
    9y

    @Iqwe Haywood....knowledge is great but properly applied knowledge by taking massive action will cure all fear.  Remember that...."Action cures all fear!" 

    2Reply
  • Mark Collard
    Investor · Las Vegas, NV · Member since 2014 · 31 posts · 38 votes
    9y

    We have people here in Vegas, Phoenix and San Diego that we have mentored  that are doing close to 6 figures a month wholesaling only, and they are in less than 2 years... and literally can NOT spell real estate.    If you are waiting to learn something, you'll never buy and sell real estate.   It's important as Jon says above... take Massive Indiscriminate Action... and then talk to sellers 24/7... and make 100s of offers a month.   

    7Reply
  • David NutakorPro Member
    Rental Property Investor · Palmdale, CA · Member since 2016 · 122 posts · 88 votes
    9y
    Jon Lee my biggest fear is having a property with a negative cash flow. At times l feel l do a good job on analyzing the property, but due to unexpected repairs l end up on the negative side. I'm beginning to think that analysis alone cannot address all issues. Luck also counts. The tenant in my Las Vegas property always has issues and l keep spending a lot of money on repairs. I just received a call two days ago that the ac unit is leaking and it's likely l'll be spending more than $500 to fix it if the home warranty company refuses to repair it. In short, my fear is negative cash flow. I hope to connect with you later for a chat. Thanks for starting this conversation.
    1Reply
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