Disheartened in Starting Out

13 Replies

After years of work to pay off all my debt (other than my mortgage), improve my credit score, and doing a  cash out refi my house to get seed money, I am BEYOND ready to get to investing.  I've been in discussion with lenders and I'm pre-qualified.  I have a great real estate agent.  So now all I need is the right deal! 

I hear on here that a lot of people research and prep but never make the jump, and I also hear you have to make sure the numbers are right.  Well I'm definitely ready to jump, but there is just nothing on the market in my price range for me to jump on!  I've been analyzing constantly, probably every house on the market in my price range.  I feel so frustrated.  I worry that I'm going to have to wait and wait and wait until a good deal comes on the market and I don't want to wait, I'm ready to go now!  I want to get started!!!

Anyone else experience this?  

Le sigh.

You may have to go out and get the deals from what I hear. Do direct mail marketing or any other type of marketing. Let people know you want to invest in RE. I look at the market in Houston constantly but I realize that's a small piece of the pie for deals.

The practice analyzing will pay off when you catch the fish though!

281-901-0954

@Janis A. Patience, my friend. Your hard work will pay off. It's a numbers game. I am ready to go as well, just got my bright and shiny "Pre~Approval" letter today! Looks awesome! BUT, I'm doing a deep dive in my due diligence, for I will be investing OOS. There are a couple that I want to buy NOW(!). Patience is the order of the day. 

You will be thankful you were patient and kept calm.  :)

Let us know when you "Pull the trigger".

Best to you!

Daniel F. Harb 

714-470-4152

If you can't find anything in the market you are analyzing, you're in the wrong market.  Find a different one.

@Janis A.

So many potential different solutions to your common problem, but the best solution depends on your particular details and there are few details in your post. Here are some examples of potential solutions.

1) Your market is super hot and MLS has investors circling like hawks so the good deals are bought instantly in all-cash. In this situation you would look into other avenues to find deals like direct mail or door-knocking if you got the skills

2) You're looking in the wrong area, central areas are much more expensive than commuting periphary areas. If you're trying to start, you might want to look at house hacking a periphary area with a bit of a commute

3) Your numbers may be off. With the FHA at 3.5% you don't need much time to save up a downpayment even in an expensive area

Can go on but you get the picture, by having all the accurate facts for a situation, you'll get better advice. Be wary of the blanket advice that some posters give that helped solved THEIR particular situation in the past. Lots of advice givers in life, not many listeners.

DO NOT BE DISCOURAGED! If you need help with something in particular, feel free to reach out. Lots of fantastic people on here that will help ya if you are willing to help yourself.

Originally posted by @Janis A. :

After years of work to pay off all my debt (other than my mortgage), improve my credit score, and doing a  cash out refi my house to get seed money, I am BEYOND ready to get to investing.  I've been in discussion with lenders and I'm pre-qualified.  I have a great real estate agent.  So now all I need is the right deal! 

I hear on here that a lot of people research and prep but never make the jump, and I also hear you have to make sure the numbers are right.  Well I'm definitely ready to jump, but there is just nothing on the market in my price range for me to jump on!  I've been analyzing constantly, probably every house on the market in my price range.  I feel so frustrated.  I worry that I'm going to have to wait and wait and wait until a good deal comes on the market and I don't want to wait, I'm ready to go now!  I want to get started!!!

Anyone else experience this?  

Le sigh.

In 9/10 cases a real estate agent is not going to help you find deals as they deal with properties listed on MLS. After the housing bubble crashed there were tons of deals available on MLS in forms of REO and Short Sales. Right now, not so much.

You will have to find your deals by either working with wholesellers, doing your own marketing, buying through autions or tax sales.. if you want to make it big in RE.   There are other options like doing more passive investing through buying TK properties etc. 

Originally posted by @Effram Barrett :

You may have to go out and get the deals from what I hear. Do direct mail marketing or any other type of marketing. Let people know you want to invest in RE. I look at the market in Houston constantly but I realize that's a small piece of the pie for deals.

The practice analyzing will pay off when you catch the fish though!

 Agreed. In my experiences, it never hurts to direct mail and reach out to sellers to find the best deal. "Driving for dollars" has been helpful as well, in some areas, it's not always openly clear that a property may be on the market, so physically going out and looking for deals shines more light on those "hidden" properties. 

Try joining a real estate investors group and do some networking. I’ve found out about off-market deals that way.

I was in a similar situation until I found my house hack around a year ago.  I had been working with a real estate agent for about 6 months and looked at a lot of properties (her words) before I found the right deal.  This included backing out of a deal that didn't make sense while completing the due diligence.  

If your market is like mine then it is probably flooded with "poor investments" that might be good for someone else, but not for investors.  You may need to expand your network as several people above recommended.  The good news is that if you have seen a lot of bad investments then the good ones will be obvious if you are patient.  If you are ready to jump (financials ready to go) then when a good property comes up you can close quickly based purely on the home not on your ability to pay for it.  This will help you scoop deals out from the average home purchaser.  Stay the course.

I'm glad to hear of all the alternatives.  I just read a recent article that home prices in my city have gone up 109% since 2014!  Yikes!  I hadn't planned on direct mail or wholesale, though I have heard of those practices here and in researching.  I will have to look deeper and then start work with that alternative considering how the market is in my area.  

I think this conversation comes down to an available marketing budget. 

If it is slim use a Realtor and go look at every ugly house you can. You will find value. 

If you have money for marketing, do this in ADDITION to working with a Realtor. 

And stop analyzing deals by number...go walk properties, get a feel for them. Everyone wants to analyze everything to death. Look analyzing by number takes all of 10 minutes if you have been doing it awhile. You probably have a spreadsheet that has all your numbers and fun little calculations. Your Realtor can give you comps for ARV. But true evaluation of comps is after it a property is seen.

Here is how I do it for my clients. I show all listings in my client's price range based on property type. I.e. detached, condo, etc, and then they tell me what we go look at. 

IMO, your Realtor shouldn't tell you no, they should explain to you the terms, and let you make your own choice.

What is a lot of houses to view is in the eye of the beholder. My last buyer walked through an average of 5 homes a week for 26 weeks and we looked all over the place. 

Regarding what the media says, I give all that a grain of salt as a few houses can skew the numbers horribly. 

The best advice is have your financials in order and be ready to write an offer on a home that appeals to you asap. The market is swift and because of low inventory many want close to retail no matter the condition. In Vancouver, on homes that my buyers want, we usually are sending offers before the start of the next business day. Meaning, if we view a house at 5pm, I am contacting the other agent by 8pm that an offer is coming and that agent usually has it in their hands (signed) before midnight. If the home is not in the MLS, have your agent contact directly (it's called a dual-agency transaction), or you can do it without an agent if you want.

And then ultimately if no properties work, like Joe said, search in another market.

Be persistent @Janis A. .  Here is what it takes for me to get one property.

+I normally look at (on paper) 100 properties.

+Drive by 20 or 30 of those.

+Analyze and make offers on 5 or 10.

+Get 1.

I am averaging 2 deals per year, so that is; looking at 1 per day, driving by 1 every 2 weeks, making 1 offer per month.

@Janis A. So this might not help but what you're facing will be a perpetual problem for you.  And the more successful you are the more of a problem it will become.  Why?  Overtime you will recapitalize quicker (if you avoid leasing the Bentley) and always be searching for that next deal.  But there really isn't anything wrong with waiting.  Every time I've had an offer declined I always have the moment of "maybe I should offer more, maybe this is the best deal there is!" and 30 days later there's something else for me to look at.  

Of course, in your situation, the logical question is what advice does your realtor have?

Hi @Janis A.

Congrats on getting all organized on the financial front.  I agree with everyone on this thread that deals are tougher to find at the moment.  My personal view point is to be patient, persistent and optimistic.  There will always be deals but I agree it takes a little more time to find them these days.  My first question to you would be what Cap Rate and what price range are you looking for?  I try and target a 6% cap rate for single family homes in my market but I am having a hard time finding those at the moment.

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