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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  • Chad Gaither
    Long Beach, CA · Member since 2016 · 44 posts · 21 votes
    9y
    Newbie here and my biggest fear is paying too much in this hot market and not being able to continue to grow a portfolio or worse have a few unexpected expenses take me out. Won't stop me from taking action but definitely a concern, especially as I'm looking locally while I learn and save.
    5Reply
  • Nick Bleser
    Investor · Northeast, WI · Member since 2017 · 65 posts · 9 votes
    9y

    I'm a newbie and one of my biggest fears is we work really hard to start our business in investing and the rewards are minimal.

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

    Hi @David Nutakor...I understand your concern about the negative cashflow and the unexpected maintenance that can come with rental properties.  reach out to me and we'll schedule time to talk about properties and tenants here in Vegas.

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

    @Chad Gaither....Other than home values, Las Vegas is very much like most of Southern California in terms of market demand.  I never focus on rise and fall of home values to measure the market, they are just a result of the demand on inventory....and both Vegas and So Cal are super hot markets right now in terms of demand. I agree with learning your own backyard first and if you can crack Long Beach, then almost all the other markets in the rest of the country are going to be easy to navigate through!  Reach out to me if you need help shifting your perspective in your market.

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

    Hi @Nick Bleser....Make sure you are in tune with your 'Big Why" and the goals that you are working to accomplish.  I guarantee you that if you put in 100% effort, then the rewards will be well worth it!  Take 18 minutes of your day to watch Simon Sineks TED talk...I know it will help you address your fear:  

    https://youtu.be/qp0HIF3SfI4

    2Reply
  • Patrick Senas
    New to Real Estate · San Diego, CA · Member since 2017 · 92 posts · 26 votes
    9y
    Hey Jon, I originally wanted to be a hobby REI but I figured why not make it a business? My biggest fear is not dreaming big enough and setting up my business to be scalable. I tend to be overly cautious and stay within my current limits, financially and emotionally. This first deal I'm scheduled to close in 10 days and it's been a wild emotional roller coaster haha. I'm currently learning the importance of setting up systems and just discovered Michael Gerbers "The E-Myth Revisited" so it'll be a fun read.
    0Reply
  • Ryan Budil
    Rental Property Investor · Lee County, FL · Member since 2017 · 26 posts · 17 votes
    9y

    As great as the economy looks right now, I am concerned that there will be a recession in the near future. I don't think that it will be like the last one we went through 9-10 years ago, but a correction should be here soon. I don't want to make a move and then have the property be valued less than what I paid for.

    2Reply
  • Patrick Senas
    New to Real Estate · San Diego, CA · Member since 2017 · 92 posts · 26 votes
    9y

    Hi @Ryan Budil, I have the same fears you do. When it comes down to it, an investment is an investment. There's always inherent risks. The same risks are present when you invest in a 401k or other stock investment, which you most likely invest in as well. So why should you treat RE any different? 

    The way I look at it is if the property cash flows now after everything is accounted for, then why wouldn't it cash flow if the market has a correction? Rental value doesn't necessarily coincide with home value. Things were just a **** show back then because there was a lot more forces at play than just home values decreasing. People were losing jobs, banks were over leveraging, etc. So even if my home value drops by 100k tomorrow, I wouldn't lower my rent price because of it. The current rental market dictates the price. So nothing really changes. 

    4Reply
  • Rashida Bailey
    Wholesaler · lawrenceville, GA · Member since 2015 · 6 posts · 2 votes
    9y

    My biggest fear right now is that i wont find a whole sale deal fast enough to leave my fulltime job i hate it ! i spent $1,147 for a real estate ivestors workshop which was extremly motivating and i learned a lot now that the class is over i have to go out into the feild and put all of my knowledge to work but with that being said im still very nervous and a little under confident thats why i joined this site to network with investors who have done these types of whole selling deals in Georgia or any where in the world i dont want to limit my options as to where i gain some more help im not in this alone my mom is my business partner and we are just trying provide for the family and gain wealth and sucess in the real estate industry 

    1Reply
  • Rashida Bailey
    Wholesaler · lawrenceville, GA · Member since 2015 · 6 posts · 2 votes
    9y

    @Nick Bleser i agree ! that's exactly how i feel right now im spending a lot of money on advertasing to get my name out there , but you know the saying... you gotta spend money to make money 

    1Reply
  • Jim D.
    Investor · United States · Member since 2015 · 415 posts · 487 votes
    9y
    Originally posted by @Jon Lee:

    @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.

    You know, that gives me a little different perspective on this. I guess I already have been investing other people's money, just in the form of conventional mortgages. Realizing that does make it less intimidating.

    2Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    9y

    Iinvesting in real estate is only about numbers. Assuming you have the capacity to educate yourself in that regard having a deal work should be of minimal concern.

    As a new landlord your biggest concern should be in regards to the processes of managing of people. Can you make business decisions without emotion or compassion.

    Not being able to make decisions without emotions should be every new landlords biggest fear. If you can not put mother and child on the street for non payment of rent without emotion you are going to be in big trouble in this business. There is no room for investors to have emotions where money is concerned.

    2Reply
  • Mike MoeBusiness Member
    Realtor · Minneapolis, MN · Member since 2017 · 79 posts · 52 votes
    9y
    Jon Lee from a newbie perspective, it's knowing at which point to dive in. I know I need to be as prepared and learn as much as possible before purchasing my first property, but I also know there are certain things that need to be learned from doing them. I can't imagine you'll be able to read and prepare for every scenario you might run into in this business. I think the underlying cause to this "analysis paralysis" is making that huge mistake! A lot can be riding on a decision like this, and the fear of screwing that up is huge! In order for me to overcome this, I've setup a detailed plan with milestones and target dates, leading up he the first purchase. That way I can make sure I'm on track, I can learn all the critical basics, and have all the plans and systems in place in time.
    Superior Real Estate Team537 Reviews
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    1Reply
  • Ronaldo Carvalho
    Richmond, TX · Member since 2017 · 14 posts · 2 votes
    9y

    Mine is like most here. That if I make a mistake, how that will affect me and my financial life. I have not done a deal yet, but looking forward to it. The best advice I found here is to focus on what I am looking to accomplish. Thanks.

    2Reply
  • Igor A.
    New York, NY · Member since 2017 · 14 posts · 13 votes
    9y

    I am a newbie. I share the same fear as you: How seriously I am going to be treated. Since I am pretty young (22), I fear that the realtor will just laugh at me and then walk away. So there is definitely that fear of being young and inexperienced and getting treated differently because of it. 

    Connected to the above, I would say another fear is something that I only recently got while reading the forums. In the thread, "Inheriting a tenant that is behind on rent????" someone (obviously not going to call anyone out, that's not my intention) basically said that no one in their right mind would sell properties that generate a good income. That basically if someone is selling an income property is because it turned out to be a bad property or just outright a pain to the owner. So now there's that fear that, when looking at properties and either doing a mental exercise or actually getting serious about buying it, there is something inherently bad about that property. That something *must* be wrong with this property or there is some hidden issue with it. Combined with my inexperience and my age, it's easy to begin fearing that you are going to get taken advantage of and ripped off. 

    3Reply
  • Michael Swan
    Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
    9y

    Hi @Jon Lee,

    Great topic!!  As I said on the podcast this week with Brandon and Scott, I believe it was Grant Cardone, don't quote me that said, "FEAR is False Evidence Appearing Real."  If you buy 1 or 2 or 10 little single family and you buy based on cash flow, have $10,000 in reserves for each single family, when Murphy's Law raises its ugly head, and use the best practices (Best Product, Best Service once the tenant moves in, treating them like the royalty they are to you and your financial freedom, at about $15-$20.00 under market rents, best value for your residents) for managing your single family,  you will most likely experience success and less risk.  Also, make sure you protect all your net worth or equity with an umbrella insurance plan (very inexpensive for peace of mind) too.

    That fear will melt away!!

    Swanny

    BP Podcast 238 (this week)

    5Reply
  • Jon Lee
    OP
    Investor · Las Vegas, NV · Member since 2014 · 471 posts · 241 votes
    9y

    @Patrick Senas...I'm always one for people to have big, hairy, audacious dreams that both excite and scare you...the kind of dreams that make the sheeple out there challenge you by saying it can't be done!  Goolge "The 9 Ways a Millionaire Real Estate Agent Thinks" from Gary Keller of Keller Williams.  Memorize that and it will give a path and perspective on tackling your dreams!

    Developed processes & systems that allow you to scale and take on each obstacle one at a time.  

    Glad that your first transaction is underway and I wish you as much profitability that you squeeze out of it!

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

    @Ryan Budil & @Patrick Senas....If you are looking to buy & hold....CASHFLOW IS ALWAYS THE HIGHER STANDARD!!!!!  Appreciate is great but I always recommend that appreciate is secondary.  You could loose over $100k in the value of your home but if you bought with the right terms you could still cashflow for years until your value comes back (a situation that many investors in Vegas found saved their portfolios during the downturn).

    Cashflow first....Appreciate second!

    4Reply
  • Raymond Leung
    Alameda, CA · Member since 2017 · 4 posts · 1 vote
    9y

    My biggest fear hopping into the market at the wrong time. I've been sitting on the sidelines for more than 3 years now waiting for the next correction, but home prices keep soaring. I've been looking at the Oakland/Eastbay areas in California, mostly looking at websites like realtor.com, Zillow, Redfin & Trulia. (Stuck in that analysis paralysis stage) Are these effective ways to find deals? I get the feeling these properties are what is "leftover" once the cream of the crop properties have been hand picked and purchased. I currently do not have an agent, but will they have access to properties that may be off the market?   

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

    @Rashida Bailey...I recommend that you don't quit your job until not only you have multiple wholesale transactions under your belt but also a strong momentum & transaction pipeline along with the equivalent of at least 6 months of your expenses saved in the bank.

    As for marketing...the best FREE marketing you can do is hit the streets, find vacant properties, talk the the neighbors to give you info on the owners or help you get in contact with the owners, and network with everyone telling then you are buying. Also you can prospect AND practice talking to sellers but calling FSBO's (For sale by owner) ads in Craigslist. No matter how much money you spend to make the phone ring...if you cant talk to sellers with confidence than you are throwing your money away!

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

    @Mike Moe...your plan is a great start AND find an investor in your local area that you can tag along with during a transaction so that you can get the experience without the risk (& the reward).

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

    @Igor A.....I understand your anxiety but it is just a story in your head...a limiting belief.  To get over that, take the action steps that you need to acquire a property and like I recommended before; if you want to experience a transaction without the risk, tag along with an experienced investor while they complete a transaction.  No risk to you AND you experienced all the steps to a deal.

    0Reply
  • Bill Goodland
    Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes
    9y
    As a newbie waiting to finish with school before jumping into their first deal, I would say that my biggest fear is buying at the top of the market, and/or missing significant opportunity elsewhere. I understand that a black swan event can occur and hurt me on my first deal, which is why I'm not going to jump into something incredibly risky; however the fear is still there. As part of the education process, I've read and listened to so much that I am worried that I may lose focus with the "shiny object syndrome" in focusing on too many things at once just because it sounded cool on a podcast. Ultimately I want to get into larger multi-family buy and hold, but between wholesaling, flipping, vacation rentals, other business ventures to accelerate that growth I fear wasting my time, effort and money in certain areas.
    2Reply
  • Rashida Bailey
    Wholesaler · lawrenceville, GA · Member since 2015 · 6 posts · 2 votes
    9y

    @jon Lee 

    @Jon Lee thanks for the advice ! 

    0Reply
  • Brittany Sanders
    Investor · Harvest, AL · Member since 2017 · 13 posts · 0 votes
    9y

    I am a newbie and I am currently working on my first deal I am scared to get taken advantage of because I am a woman. I am scared in general to loose everything. I am going to follow out and try and get the best team I can stay strict but not over bearing, While in sales I have picked up a couple of strategies that will work in my favor. I just have to try because it is something I have be wanting for a long time. 

    0Reply
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