Am I the only one struggling? Real Estate advice please!!!

37 Replies

Hello everyone, I need some advice please. I have been struggling to get into real estate investing. I've been reading a lot of articles, watching videos joined different real estate investor sites such as BP. Everywhere I look people make it sound so easy, but it is not at all especially if you don't have a lot of funds to invest. I spent money on programs to train me, been to meet ups for networking and still nothing. Initially I was starting with wholesaling b/c I have minimal to no funds to get started. So, I worked with some real estate agents to find distressed properties, found some cash buyers but still got no where, more so because the agents I worked with that claimed to be investor friendly knew nothing about wholesaling . Then I thought about rehabbing properties but not enough funds. When things didn't go as planned, I became discouraged and stopped trying for a while. After some time, I am back at it again because I am not going to give up! I just need help and some guaidance. I plan on moving out of my parents house and have been thinking about starting off with rentals or "house hacking" but I am unsure if that is the route to go.? Any experts or those that have struggled initially can you please share your experience and advice on what I should do to get the ball rolling. I really want to succeed in real estate investing. P.S. I am saving money too.

Go get a job first.

House hacking without funds is probably the most difficult career. A few made it most dream about it but can not do it. Almost all had another full time job found a niche and want to manage their own schedule.

If you think you want to try it getting a realtor license could be your first step understand the laws and tools. Again 90% fail to pursue it as it is just a notch easier. 

I'll be honest, I've had a pretty stressful time of it too lately. I have a great realtor, who understands investment property and to my knowledge exists solely in this space. We just cannot find the right deal.  It's frustrating, you want to throw the baby out with the bath water after each failed deal only to realize that changing at every obstacle is also not wise.

There are two things I already knew, but are worth mentioning. Well three.

1. Nothing is easy. Especially when you're learning. After ten years as a property manger I know a lot, but there is so much more to learn. Yes, at the end of the day money may have come through simple deliverable processes, but I doubt I'd ever call them easy. You have to understand that mistakes will be made and have planned accordingly.

2. Nice....and Business are not words that need to go together. Your realtor is either right for you or not right. Nice, good people skills, well connected, whatever....those don't matter if they don't understand what you're looking for. Friend, acquaintance, recommended by a friend...NOPE! Investment focused realtor or move on.

3. Personal analysis. There are million get rich quick videos on the internet. Some folks have copied those videos and made a fortune. Most have failed because of their work ethic. It's cliche, but the damn truth. If you're not willing to put in the work, then you need to find something else to do. Raising/Saving capital is a part of that. Making the connections, meeting quality contacts, BUSINESS DEVELOPMENT....are all a part of that. It's very easy to read a website, but until you're truly sacrificing something to save capital, you're not really committed to this.

Number 3 is the hardest. Probably what makes my wife and I bicker more than anything in our marriage. The self reflection...you have to be able to say "Yeah, I suck at that."

I would recommend looking into house hacking a duplex with 5% down using Fannie Mae or FHA programs. Assuming a duplex at 400k in NJ, do you think you can comeu with 20k down payment?

NJ/NY and northeast/west coast in general are the toughest market anyway - so it will be hard. Think of it as ivy league university. Everyones struggles...

@Nadine Delille It's definitely not easy, but nothing good in life comes easy. If I would have started with wholesaling, I would have been as stressed out as you were. I think most people make wholesaling seem so easy, but it's really not. They say you find a deal and a buyer and boom, you're rich! But no, it's not like that. I think it takes even more work than investing in your own deals. 

I think house hacking would be a great way to go. If you have a full time job and you're saving money, you can put the 3.5% down on a duplex, triplex or fourplex and live in one of the units while you save more money for another deal. I live in New York where it's extremely expensive to buy so I could not do a house hack. My husband and I saved money for about a year to purchase rental properties in Florida. We bought our first one in February of this year and are closing on the second one now. It took a ton of analyzing deals. I don't know how many hours/days/weeks I sat in front of the computer searching. So although it sounds easy to say we have two rental properties, it wasn't that simple. I hope the house hacking can work out for you. Start with something simpler, get your feet wet and then get into the more complicated deals. We started with rental properties using the 20% down conventional mortgage and after this we will try hard money for a flip. If we started with hard money and a flip, I'm sure we would've been in the hole right about now. Good luck!

I know it is not the most popular way into REI but, I say find the deal and then go find a lender. Finding a DEAL is the hardest part. Find a deal, look for a lender.

IF you have to find someone as a JV or a silent partner or and equity partner. An equity partner might take half of the deal but, you will own half of it and they put up their experience and their cash for the deal you just have to find the deal.

Good Luck and don't get overwhelmed.  

Remember this: Did you eat today? If the answer is Yes then you really don't have anything that is happening that you can not handle. If it is stressing you out stop doing it. Find another way to make money. 

Tag me if you have any questions. 

If everywhere you look people are making it sound easy, then you are looking in the wrong places. The people that make real estate sound easy are to trying to sell you something. Real estate is a lot of things, easy is not one of them. 

You need to get a job in real estate. Make money for someone else in exchange for knowledge, and go off on your own when you're ready. 

@Nadine Delille Which part of New Jersey are you looking to invest in? I live and invest in Newark. House hacked my first and have my second under contract. DId not start out with much, just lIke you👍 Here are the steps I took prior to buying my first house hack: 1. Research neighborhoods you potentially want to buy in. Familiarize yourself with the area. Drive by, street by street to get a good feel. City-data.com has some nice census data breakdowns by zip. The maps are broken down by census tract . I look at % change in median income between 2000 and 2010. If you are in northern NJ . being close to an nj transit statIon Is a plus. 2 . Once you narrow it down look at pricing , taxes , rental rates etc. get a good return calculator to figure out what you will cash flow . 3. Start talking to mortgage brokers. Look at all the homeownership programs out there. Fannie Mae , Freddie Mac , etc. know your credit score and own it . Figure out what you need to get it to a good place (if it is not already) 4. Look into home ownership programs offered by the city and state. Down payment assistance etc.. special terms for certaIn employment types. HUD homes IncludIng FannIe have 30 day owner only perIods so keep an eye on theIr listIngs Once you have your ground work layed out go look for a house. Multi-family is your best bet . The most difficult thing to do is to get off the sidelines. The best lessons you learn in RE investing are the ones you teach your self . Hope this helps and best of luck
@Elenis C. So are you renting currently, since you said you couldn’t afford a house hack or did you buy a single family? I live on Long Island and my husband and I want to do a house hack to lower our housing expemsws. We’re honestly not even looking for cash flow but just want to decrease our expenses so that we could save up money quicker. Do you think that’s even a possibility in NY?

Nadine, it is imperative that you are employed and save every penny you earn. At times I worked three jobs. You can't buy real estate without a down payment. And nobody is going to give you a mortgage if you don't have sufficient income. Live below your means, and save up for that down payment.

@Alina Vengerov We considered purchasing an apt to live in in Brooklyn but then realized we would need to save over 100k for this. We purchased two single family homes in Florida, where we are originally from. Those are our rental properties. We would looooove to house hack but seeing as it’s so expensive to buy in Brooklyn and we aren’t going to stay here long term, it doesn’t make sense for us. I’ve heard Long Island is a bit more affordable. Is it true? We moved to Brooklyn 2 years ago so we are still pretty new to NY. How long have you been here?
Originally posted by @Nick C. :

If everywhere you look people are making it sound easy, then you are looking in the wrong places. The people that make real estate sound easy are to trying to sell you something. Real estate is a lot of things, easy is not one of them. 

You need to get a job in real estate. Make money for someone else in exchange for knowledge, and go off on your own when you're ready. 

 What nick said.. if you want in the club go get a JOB in the club if your undercapitalized.. wholesaling is VERY tough and takes a lot of capital to do right and in  some markets its just not feasible at all.

In fact, I would say most people who are actually doing real estate are having a hard time. Not necessarily financially, but deals are tough to come by these days. Doable, but not easy. 

The way to make real estate easy is to tell everyone how easy real estate is, and profiting from people's desperation. That's where the big bucks are these days, as long as you don't have a conscience. 

@Elenis C. I’m from NJ originally but been living on Long Island for about 5 years. In my opinion, it’s very expensive unless you’re willing to live in worse neighborhoods. And even still, those aren’t cheap. I haven’t been looking for that long but I’ve mostly seen $350k and up, and anything on that low side is a serious fixer upper. The issue also is that taxes are so high, they’ll eat into any margin. We have a year left on our lease, so I’m going to keep looking to hopefully find that diamond in the rough. We don’t really have the option to leave as both our families live here and we’re licensed to practice law in NY and NJ only. I’m just wondering if there are people out there who have made this work. Do you have someone managing the rentals for you in Florida?

@Nadine Delille Real Estate is market specific. There are many people or companies doing real estate in your market right now. But the ones making money in your market may be professional real estate investors rather than a novice investor. I don’t mean to offend but there are markets that beginners can do better in than others because of the skill necessary in some markets. 

I live in both Arizona and California. I invest in Arizona over California for several reasons. The political climate makes it easier to invest in Arizona over California. The price points are much lower in Arizona than in California, thus the barrier of entry is lower and the risk as to the amount of possible loss is much lower too.

In some markets, it is much easier to find properties that make good investments. But then you need to find food management which may be the more difficult thing to find of the two.

I have not had as difficult of a time finding properties as you have described but that is probably because of the market I am in, the people I have partnered with, and the connections I have made over the past 4 years or so.

I would suggest finding a mentor, bringing value, and then doing what your shows you to do.

Good Luck.

RE investing is not supposed to be easy. Websites like Bigger Pockets make it look easy because of selection bias. You rarely hear from those who crashed and burned from REI. Ask them, and they'll tell you to never touch RE.

Your principal problem is lack of capital to invest. Focus more on building personal savings and increasing income (is there a possibility of picking up a part time job?) . Its not the most exciting answer, but it is the most sensible one. Analyze and optimize your personal finances, and invest in less capital intensive vehicles (index funds, blue chip dividend stocks, bonds) to save up for a bigger down payment. I personally apply a great deal of what I learned from dividend investing into RE investing. 

Although I understand your frustration and struggles in getting your first property, there far worse problems in REI: being squeezed for cash while having bills to pay. If you leverage 20 to 1 (with 5% down) and have little to no reserve funds, you are one slip away from financial wreckage. Accept **** happening in RE as a rule, not an exception. Be prepared for unexpected repairs, difficult tenants, tenant losing jobs, etc.

Whole saleling, especially in certain markets, is a brutal business. I raise my eyebrows when I see it being recommended for those starting out with little capital and no experience. Sure, few may make it and do well, but they are by far the minority.

@Joe Lee I plan to write a book about my experiences with Vulcher Capital businesses that bought packages of commercial loans from banks and then extorted payments from the owners. Should be entertaining!

@Nadine Delille Real Estate is only easy when you master a particular strategy to purchase and hold or purchase to sale. First, you must determine what you want. What is your current situation. What short and long term goals you have in mind.   It just can't be Real Estate Investing. Example: Determine if you want cash flow for long term or to flip for short term. Cash flowing properties (rental property) is delayed gratification, however, it is your path to wealth if you know how to control the cash flow and reduce risk of bad tenants. Flipping property (whole selling) is a lot quicker to generate a lump sum of funds. However, it is very competitive. and you must know what you are doing.. 

Study both while keeping in mind what your end goals are. Not to be discourage... Both strategies are great. 

Rental Property: With rental property, you have 2 things to worry about. (tenants that won't pay rent) and (damaged property from bad tenants) You can reduce this risk by the following: Increase your cash flow by renting to tenants through non-profit Organizations. Non-profits usually have some sort of program in place to pay for the tenants rent. However, you must have a relationship with that Non-profit.

Flipping Property: Have a friend or a person in line firsts that is looking to buy investment property.This could be your insurance agent, the neighbor up the street that own investment property. Get the specifics of what they are looking for then go out and find a motivated seller whom is selling a property 50% under market value. Place it under contract and then sale it to your buyer. 

You are on the right path by looking at your videos and reading up. But sometimes it can be information overload. Just take your time and study what you don't understand and it will come clear to you...

I hope this helps.....

My advice:

1.  Realize it will not be easy, but it is worth it in the long term.

2.  Get stability and cash reserves first.  Make sure you have your personal finances under control, a stable job. This will make getting into the investing (even if you are doing "no money down") much more doable and success will be more attainable.  

3.  Stop paying for education and .  The only money you need to spend, in my opinion is on books.  BP has ~300 hours of podcasts of great information.  Submerge yourself into it until you know what you want to do.  Read as many books as you can.  

4.  Determine your "why" - Do you want passive income, a job, etc?  If you want passive income, I would start by house hacking a small multifamily property once you are able.  This is a great step to learn and start growing your portfolio.  If you want a job, consider wholesaling (perhaps the hardest of all), flipping, being an agent, etc.  For any of those, you definitely need to find someone in your area successfully doing that job and figure out how to add value to what they are doing and you will start learning from them.

Good Luck!