So what's holding you back?
Rental Property Investor 路 East Providence, RI 路 Member since 2018 路 1k+ posts 路 1k+ votes
When I help new investors with buying their first property I often want to know what is holding them back from pulling the trigger.
So I'll ask here. What is holding you back?
Having just recently bought my first property, I know for myself what was holding me back was the fear that I would overpay, especially in this type of a market. I would get analysis paralysis and basically talk myself out of every property I looked at.
I've been involved in REI for about a month now. What's holding me back is I haven't decide what type of investment I want to focus on. Fix&flip, wholesale, buy&hold, etc. I read a couple of books, listen to podcast, YouTube video but so much information overwhelm me, I some time I just feel like taking a metal break. I feel I go no where.
What is your strength? Time, money, or experience? That might help you decide the type of real estate investing that you should focus on.
@Frank Patalano fear that I won't be able to find renters. I have a fear that I will get a great property. Fix it up and then...Vacancy.
@Frank Patalano what was holding you back? Investor for 15 years, bought your first property in 2009. So you owned for 10 yrs, invested for 5? Must have had a fat wallet to buy 65 properties and 300+ syndications in 10 years
Started with some tax delinquent properties and vacant land. Bought first rental around 2009.
65 units not properties.
We do okay. What held me back? A regular job. Now? I was so spoiled buying cheaply years ago that I hate spending so much money on new opportunities.
What about you?
I just need a lot more time to understand the process and get my educational foundation created. I've only started binging this stuff for about a week now. I'm hooked, I don't have much money, so I'm just really focused on saving as much as I can as soon as I can so that once I've gotten comfortable understanding the basics, I can spend the weeks to develop my plan before I actually get going.
I'm a big learn and plan first guy, so it's really all about getting all of that down before I actually start approaching CPA's, lenders, lawyers, realtors, etc.
You are early in the process so keep going.
Set goals to do so much reading a day. Try to listen to at least one podcast a day. Try to go to one networking event a week.
I wouldn't worry about a CPA yet. Get yourself 3 people first. A lawyer, a contractor, and an agent.
Go out there and look at so many properties a week.
Sounds good--Before I do that, I still need to determine my plan---including choosing whether I'm going to go with straight real estate investing, wholesaling, houseflipping, and/or BRRRR. I really need to study the pros and cons of these and how they fit into my goal(s). Any advice on that?
What are your goals?
Well, that's a loaded question. At an 80,000 foot level, I want to get to $50k/month; My ideal timeframe is to reach this goal by the end of 2025. I'd like to begin passively, with REI being a side hustle until I'm able to reach $25k/month before quitting my job and going into REI full-time for another 15 years and be done by 55.
If you want to start passive but don't have a lot of cash you could invest in buy and hold rentals with property management. The more cash that you have, the more that I would lean to hard money lending.
@Frank Patalano fear that I won't be able to find renters. I have a fear that I will get a great property. Fix it up and then...Vacancy.
If it is a decent area that will not be a problem. We rarely have a vacancy for more than 30 days and that's including touch up.
Local networking is probably going to be your best bet.
Search the events near you on BP: https://www.biggerpockets.com/...
I'd also post in the BP sub-forum for the area you live in. Chances are favorable there are experienced folks out there willing to bring on a partner for a fix-and-flip project. You have to get to know folks first.
Finding an investor/realtor hybrid in your area to talk to might also be advantageous to your networking.
Look outside of BP and Meetup for networking as well. All of the biggest and best groups in my area don't need to post. They already have over 100 people going each month.
@Frank Patalano well what鈥檚 holding me back is that I live in Nevada . And I鈥檓 looking for a four plex
I don't understand. Do they not build four plexes in Nevada? I guess we don't have that many here as well. A lot of triplexes though. Sometimes you have to work with what you got. You can't always wait for the perfect property.
Whats holding me back is fear and money..
Im looking at putting in a bid on my first property. A 2 family 3bedroom 2bath side by side duplex in foreclosure. I want to make it a owner occupied rental. Not necessarily a cash flow but rent/mortgage free allowing me to save up and purchase my 2nd property. I look at opportunities 2-4hrs daily.
My fear is upon purchasing the multi family.... the rehab process and time, Trying to pay my rent in the meantime until the duplex is Livable.
Getting it rented out as soon as it ready I don鈥檛 have any fears. Prime locations great school low crime popular location. Just the fear of the rehab process with a 203k (fha) and finding a stable,qualified contractor for a full home rehab .
I also have a lot of ideas since it鈥檒l be my home on one side.
New hard wood floors, central ac. Updated electrical, new bathroom, new roof, siding. Front and rear porches. I鈥檓 honestly terrified I鈥檇 go over budget and not get what I want or would want in a quality rehab.
(The reason I want to update all new because the before the rehab process is even start if I can get it for the foreclosure amount the property has over 80k in equity and the revaluation after the rehab I can only imagine will sky rocket)
But my ideas and dreams can crash and I鈥檇 be stuck.
Any positive and insightful tips would be great!
I know that you plan on living there but don't over rehab. Sometimes that gets people into trouble. Put more money into the side that you are going to rent to start. You can do small upgrades on you your side once you have a tenant.
I hope that the bank will let it go cheaply but they often will try to sell it for more that what is owed.
#1 Priority get the other unit rented.
Funds
I worked a second job for years to build additional money to invest with.
You can either do that or find a partner with money and you can share the profits.
Holding me back ummm? Fear and money of course just like the rest :) I do feel that the more that i get educated the more the fear will be replaced with excitement to invest. I am truly a newbie just started to research properties and learning the ins and outs. I have narrowed down what I would like to do its just finding the financing and the right deal. I live in Denver and love my area but the prices are high just haven't found the deal yet but I will keep looking. In the meantime more research and saving money.
You're doing fine. Set goals on how much reading and listening that you are going to do daily. Then add in networking. Then start looking at properties.
Dont expect to find the perfect deal. Just find a decent one and take action.
@Frank Patalano
Great question. First thing I saw when I pulled up the forum. Answer : Life happened.
Got one duplex already, rented out, while I rented somewhere else for cheaper rent than I was charging hehe. The apartment I lived in was listed to sell so had to move out, bought another house I decided to move into and fix ourselves. Thought it was a great idea, but has taken me a year to be at where we can finally live in it without stepping on boards, tools, and debris in the middle of the night, well technIcally the pile is smaller (shrugs). Discovered Bigger Pockets and a few other shows , and been lIstenIng to podcast episodes and audiobooks for a year while I did demo on walls, fixed termite damaged boards, fixed plumbing, resurface hardwood floors, etc etc etc etc (drywal) etc. All while working a demanding full time job and picking up side gigs. In retrospect wished I had listened to the podcasts first. I would鈥檝e waited on the house and buy another rental investment first. Oh well here we are. Can鈥檛 complain it was a great deal, house In need of TLC in the block of a Great neighborhood. Now taking a breather and regrouping before pulling the trigger again. Local area is prices are $$$crazy$$$. I鈥檓 starting to look out of my area, maybe even out of state, but not feeling confident to pull the trigger just yet.
(Btw... first official post on a regulat topIc thread in BP forum...). 馃
I hope that the bank will let it go cheaply but they often will try to sell it for more that what is owed.
#1 Priority get the other unit rented.
Thats for sure!
I don鈥檛 think what I have planned in over rehabbing but construction cost in Ny are ext higher compared to other states.
I.e
New roof
Central ac for two units
New kitchen and bath both units
New electrical (old outdated)
Front and rear porches need to be redone
New plumbing (frozen pipes) house wasn鈥檛 winterized
New drywall
Can reuse most of the windows just new screens
Security system and cameras
New lightning (flush lighting)
New roof on the garage and garage doors (possibly insulate) for winter time
want to add a 1/2 bath to the first floors of each unit (More rental appeal 3bd 1bth vs 3bd 1.5 bath)
Siding And paint
Had ideas since it鈥檒l be home of doing spray insulting to the attic (livable space) (save on heating and cooling cost long term)
I hope that the bank will let it go cheaply but they often will try to sell it for more that what is owed.
#1 Priority get the other unit rented.
Thats for sure!
I don鈥檛 think what I have planned in over rehabbing but construction cost in Ny are ext higher compared to other states.
I.e
New roof
Central ac for two units
New kitchen and bath both units
New electrical (old outdated)
Front and rear porches need to be redone
New plumbing (frozen pipes) house wasn鈥檛 winterized
New drywall
Can reuse most of the windows just new screens
Security system and cameras
New lightning (flush lighting)
New roof on the garage and garage doors (possibly insulate) for winter time
want to add a 1/2 bath to the first floors of each unit (More rental appeal 3bd 1bth vs 3bd 1.5 bath)
Siding And paint
Had ideas since it鈥檒l be home of doing spray insulting to the attic (livable space) (save on heating and cooling cost long term)
So as you are networking get referrals for as many contractors as you can. Some of them specialize. Every contractor wants fmtondi a roof but some are more qualified than others. Also watch for mold since the pipes froze.
Sounds like you are doing some nice upgrades. I dont know if I have central ACs at any of our properties.
@Frank Patalano
Great question. First thing I saw when I pulled up the forum. Answer : Life happened.
Got one duplex already, rented out, while I rented somewhere else for cheaper rent than I was charging hehe. The apartment I lived in was listed to sell so had to move out, bought another house I decided to move into and fix ourselves. Thought it was a great idea, but has taken me a year to be at where we can finally live in it without stepping on boards, tools, and debris in the middle of the night, well technIcally the pile is smaller (shrugs). Discovered Bigger Pockets and a few other shows , and been lIstenIng to podcast episodes and audiobooks for a year while I did demo on walls, fixed termite damaged boards, fixed plumbing, resurface hardwood floors, etc etc etc etc (drywal) etc. All while working a demanding full time job and picking up side gigs. In retrospect wished I had listened to the podcasts first. I would鈥檝e waited on the house and buy another rental investment first. Oh well here we are. Can鈥檛 complain it was a great deal, house In need of TLC in the block of a Great neighborhood. Now taking a breather and regrouping before pulling the trigger again. Local area is prices are $$$crazy$$$. I鈥檓 starting to look out of my area, maybe even out of state, but not feeling confident to pull the trigger just yet.
(Btw... first official post on a regulat topIc thread in BP forum...). 馃
Welcome to the topic. Boy is Miami hot. 馃敟
So you've learned a lot and done some great things along the way.
You can look in other areas but I would also network alot and see if you can find an off market deal nearby. The best deals never hit the market. And you have connections and are willing to do the sweat equity locally.
@Frank Patalano I live in San Francisco Bay Area, one of the most expensive place in the U.S. Investing in this area is not wise. The only reasonable investment for me is out-of-state properties. The good part is that we've got plenty of options. But it requires lots of research.
Currently, my wife and I are reading several books from the BiggerPackets including Long-Distance Real Estate Investing by David Greene. All the books we've read so far are pretty good and they gave us lots of confidence. My plan is to make the first investment in a year. As I said, the most daunting task so far is to find a market that fits us.
@Frank Patalano I live in San Francisco Bay Area, one of the most expensive place in the U.S. Investing in this area is not wise. The only reasonable investment for me is out-of-state properties. The good part is that we've got plenty of options. But it requires lots of research.
Currently, my wife and I are reading several books from the BiggerPackets including Long-Distance Real Estate Investing by David Greene. All the books we've read so far are pretty good and they gave us lots of confidence. My plan is to make the first investment in a year. As I said, the most daunting task so far is to find a market that fits us.
Sounds like you are on the right path. Give yourself 3 months to narrow it to be markets. Then if you are able to visit each one. Network and invest.
Lack of funds. I would definitely have properties if the money was there.
Lack of funds. I would definitely have properties if the money was there.
If you have time but no money, look for a partner that has money but no time. Then you can get deals done.
@Frank Patalano
Living in NJ makes me want to invest out of state.(property taxes) Delaware and Philly are nearby options.
Mentally blocked by:
Analysis paralysis
Considering setting up a Series LLC with Delaware so close.
Considering if I even need a LLC to begin.
Considering a turnkey property as my first(name a few good companies)
Wondering how much money I need in the bank(for reserves and loan requirements)
Need to talk with a CPA to see if it's beneficial to setup an LLC or not(tax benefit wise)
And many more mental blocks.
Help!
I wouldn't say anything is holding us back.
We are strategically paying down our personal Debt and will be debt free except our current mortgage and my wife's student loan by the end of the year.
2020 will be our first investment property.
Nice job. Keep it up. I hope that you are continually educating and networking as well.
I just need a lot more time to understand the process and get my educational foundation created. I've only started binging this stuff for about a week now. I'm hooked, I don't have much money, so I'm just really focused on saving as much as I can as soon as I can so that once I've gotten comfortable understanding the basics, I can spend the weeks to develop my plan before I actually get going.
I'm a big learn and plan first guy, so it's really all about getting all of that down before I actually start approaching CPA's, lenders, lawyers, realtors, etc.
You are early in the process so keep going.
Set goals to do so much reading a day. Try to listen to at least one podcast a day. Try to go to one networking event a week.
I wouldn't worry about a CPA yet. Get yourself 3 people first. A lawyer, a contractor, and an agent.
Go out there and look at so many properties a week.
Sounds good--Before I do that, I still need to determine my plan---including choosing whether I'm going to go with straight real estate investing, wholesaling, houseflipping, and/or BRRRR. I really need to study the pros and cons of these and how they fit into my goal(s). Any advice on that?
What are your goals?
Well, that's a loaded question. At an 80,000 foot level, I want to get to $50k/month; My ideal timeframe is to reach this goal by the end of 2025. I'd like to begin passively, with REI being a side hustle until I'm able to reach $25k/month before quitting my job and going into REI full-time for another 15 years and be done by 55.
If you want to start passive but don't have a lot of cash you could invest in buy and hold rentals with property management. The more cash that you have, the more that I would lean to hard money lending.
Hmmm, I haven't done a lot of research into the Buy and Hold process just yet. I'll take a look.
This is a big obstacle for me to overcome. There's a lot more downside risk than there was even two years ago. If it were 2013 I'd be over the moon excited and diving in. But 10 straight years of nothing but up? And a big election next year that could have huge implications on the economy? That's a tougher pill to swallow.
I've owned a few REIT stocks since 2013 or so and most are 2x gains at least. Even those I look at and wonder if those are topping out.
The cash flow vs equity dilemma. Preservation of capital.
@Frank Patalano
Living in NJ makes me want to invest out of state.(property taxes) Delaware and Philly are nearby options.
Mentally blocked by:
Analysis paralysis
Considering setting up a Series LLC with Delaware so close.
Considering if I even need a LLC to begin.
Considering a turnkey property as my first(name a few good companies)
Wondering how much money I need in the bank(for reserves and loan requirements)
Need to talk with a CPA to see if it's beneficial to setup an LLC or not(tax benefit wise)
And many more mental blocks.
Help!
Thought that I responded but don't see my response so here goes again.
it doesn't matter if you invest in state or out of state as long as the rents cover the difference in high taxes. I would set goals 2 look at so many properties a week. It does not matter how low of an offer that you make. The worst thing that can happen is that the seller is going to say no. I would recommend an LLC but don't get too fancy considering the differences between different state ones and everything else. All of my llc's are in 1 state. Turnkeys are sanitized to give you a lower return. Lower risk but lower return. A typical mortgage on a rental property is going to need 25% down. They're going to want a couple months of mortgage payments in a bank account and usually Insurance paid for one year.
the good news is that you can write a lot of this stuff off. Even some traveling, Etc. Hopefully some of these answers got you moving forward.
@Frank Patalano I appreciate the reply. Thanks for answering the specific questions.
My main focus is to attain the cash flow to retire early. Who better to ask than the cash flow king.
I currently have about 10K in credit card debt i'm trying to clear. I also have a personal line of credit of $15K avail(5K balance) that I have been using to accelerate my debt elimination.(eliminated almost $20K in debt since March)
So i don't won't have the 25% down payment anytime soon unless I do rental properties in the $40-$70K range.
My additional questions to you is, how much Cash Flow can I typically expect from a turnkey vs doing it on my own? I understand that every deal is different.....I'm just looking for typical ballpark numbers. are we talking $100-$400(max monthly turnkey) and maybe an additional $100-$200/month by doing it on my own?
I constantly get bombarded with mail offering $30-$50K personal loan options. Could/Should I use this for down payments? And would the bank use this against my DTI, even though the money is sitting in the bank? I would Pay the loan off right away if the Rental Property lets me pull all/most of the equity back out.(after the down payment) to pay off the loan.
Can you even pull money out of a turnkey property?( I hear they take a portion of the equity sometimes?)
Thx again.