There seems to be a gap between what the beginner guide, articles, and podcasts teach and what I don't know, which is this: applying all of the formulas, calculations, and tips to real world examples. I can do calculations all day, no problem. But when I look up listings of properties, what I see is complete Greek to me. I don't see the variables to be calculated. I see listings with no information, or wildly varying information, or no photos. Everything decent is far and away too expensive. The few things in my price have been listed for 100+ days, and don't look like deals.
Bear with me here as I go on. . . I don't know how you're supposed to know what's noise and what are listings even worth looking at. How happy I would be just to be able to run the numbers on a "pretend" deal (by pretending I have more money than I do) as a hypothetical learning tool. But I'm not even that far in knowledge yet.
I don't know how to do the 1% rule because the listings I find don't tell me what a potential sensible rent would be (and the other properties around the area vary wildly by type, size, renovations, price, and everything else). I don't know if foreclosures are good or bad or how to read them. I don't know when a place would need basic repairs, or major repairs. How do you know if something being auctioned is good or bad?
Surprisingly, many of these things aren't covered in the beginner material. I've posted a few questions so far and the feedback has all pointed to one overall answer: go out and talk to people in real life.
Okay, I will do that!
However, one of the reasons why I find it better to ask for help in the forums and go through articles and podcasts is because these all seem like absolute beginner questions that I am asking hypothetically, just to learn how to answer them.
I am ready and willing to go out into the community, but if I am going to go out and put down $20 for REIA meetings, miss work to go to lunch chats, or take potential mentors out for coffee, not to mention cold call or email realtors, I want to do it right.
Have I ever analyzed a deal? No. So I don't want to be sitting there, having nothing to contribute other than question after question, not knowing a good neighborhood from a bad one, while experienced investors walk away from me mid-sentence (read about that several times on the forums here). I don't want to approach someone working on a for-sale house and ask, "So. . . is this a. . . good deal?"
I can't tell you how many times I've gone to a club or meetup group and at the end of it realized I came away with absolutely nothing gained, not because of anything they did, but because I didn't even know what I needed to know. I don't want to stutter and stumble on the phone with a realtor because I can't answer her questions. My local REIA meets up an hour and a half away from me. I don't want to commute 3 hours just to "absorb" or "get the feel" of the scene without something concrete I am there to learn more about. I don't have a car, so if I am going to drive around a neighborhood (by virtue of borrowing or renting a car), I don't want to do it completely aimlessly. Time is valuable. I don't want to waste it when I don't have anything concrete to focus on.
Now, I am in favor of doing these things to learn when it's necessary. I am against doing them mindlessly. I want to work hard but I want to work smart.
Again, I am not against going out and talking to people, but I just can't accept that word-vomiting all of my potential questions to someone I just met would make any sense. My research has led me to read stories on here about meeting groups and the general consensus I get is that people there know what they're doing and want to associate with others who do, too. Should I really be going out to groups when I am at square one? Should I really be investing money and time to absorb information when I have what I thought were absolute beginner questions?
I know I may be frustrating the regulars here with what seem like repetitive posts, so I apologize! One day, I'll have it all figured out. . .
When you have it all figured out, let me know.
You have to know the market where you want to invest. My market is a town of 50,000 people, I know what properties in that town will rent for. I then know what I would pay for a property. I know what it cost to rehab houses.
What do you want to invest in? Figure that out and go do it.
@Arlan Potter Thanks? I'm asking how you would go about learning those things.
Keep studying, asking question, legwork,
But this IS me asking questions. . .
Jared, you gotta do it wrong before you do it right. You're going to waste time. You're going to have to commit to the learning curve. And you're going to have to deal with uncertainty and not getting all your answers all at once and dealing with misleading information along the way. You have to adopt a research mentality. This is what valuable real-world learning is always like, not the spoon-feeding we've all come to expect from our miserable educational system.
Trust me, it's not all Greek to you. Αυτά είναι ελληνικά. Numbers are Arabic in origin.
You don't know what a sensible selling and renting price is for a neighborhood? Get your walking shoes on and start looking at open houses every weekend and keep track of what they sell for. Check out rental listings. Learn neighborhoods in your area if you want to invest locally, get in close touch with people in your target area if you want to invest long-distance. Don't know what the cost of doing repairs is? Learn how to do some of those repairs, read home improvement books, spend enough hours in Home Depot and Lowes checking prices that everyone knows your name. SPEND MONEY ON AMAZON. Used books are an incredible resource.
Don't know how to calculate property taxes in your area? Ask the people who collect the taxes.
Don't let an auction buy be your very first deal. If your area is anything like my area, there are maybe eight guys who make serious money at the county auction and everyone else who bids is really just paying to learn that it takes a lot of work and brains. I spend eighteen months going to the local sheriff's sale before I started actually bidding on properties. I considered it investing in my education. And yeah, one or two experienced guys and, gasp, lawyers representing the banks, helped me out because they saw I wasn't playing around or wasting their time.
You're here and you're asking questions. You may be getting plenty of BS answers. But that's par for the course. 90% of the people on this website never take action, apparently. Maybe 5 percent actually know what they're talking about whenever they write posts here. The rest is fluff, people promoting themselves, people who are desperately locked in a fantasy that they're big time successful real estate investor, or people who are no good at conveying complex information, or just people who should have the simple sense not to write half the posts they do.
Send me a message. Ask ONE question. Just ONE. None of this scattershot diarrhea of the fingers, this emo pleading for spoonfeeding and aversion to actually finding things out for yourself that all too many of your generation seem to be addicted to. This is one reason so many of us dislike gurus so much...perhaps the most important part of doing this is becoming accustomed to failing and getting up again, to figuring out anything even slightly complicated for yourself.
"Aut inveniam viam aut facium."
@Jim K. Thank you, Jim. What a great, inspiring answer! I'll PM you.
@Jared G. , from another new investor's perspective I see your challenge. It's like drinking from a fire hose. I can tell you what I did was review as much of the free content here and dialed in on a few people that made sense to me like @Brandon Turner , @Ben Leybovich , and a few others I found on the Podcasts. There are a TON of others but like you I had to find a way to get started and narrow my choices down. I have started to explore others and expand my network. You will always be learning so you can expand to others as you get to a point some of this makes sense. Also, don't forget you tube as the videos that walk you through some of what you hear are useful as well. Lastly, go to a meet up in your area and start talking to others. I recently went to one and networked with other investors who were: realtors, insurance agents, contractors, etc. Great connections.
If I can help in any way send me a note.