So what's holding you back?

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So what's holding you back?

Frank Patalano
Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 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?

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Jacob Gelinas
Providence, RI · Member since 2018 · 29 posts · 409 votes
7y

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.

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  • Account Closed
    Rental Property Investor · Farmington Hills, MI · Member since 2019 · 36 posts · 7 votes
    7y

    @Frank Patalano

    For me, it’s not really a matter of taking action, but rather a choice on which route to go.

    So, here is a brief summary of me and my situation;

    

    I’m a 21 year old kid from Michigan, currently netting $32,000/yr from two different jobs, plus an additional $3,000-7,000/yr from side hustles. (I’m a chef, and I help maintain an 80,000 sq.ft. office building. I do property maintenance.) I’m able to save at least 65% of my total income a year. My desire is to be a landlord and to invest in real estate. I have a mentor that I work with everyday who has the connections and experience in real estate investing. He’s no Grant Cardone, but he has flipped 6 condos in the past year and currently owns two rental properties. His gig is flipping. God willing, mine will be renting. I do not own any properties yet; but currently, my credit score is 710, I only have $10,000 for reserves, and my knowledge of this industry is broad. So, I have a couple more years before I’ll be ready to purchase my first investment property.

    However, my advisers believe I should finish college, so I’ll have an education and a better chance at an entry-level job in the years to come. They believe I can then use that job to fund my ambition, plus have a degree to my name. While I understand their point of view and agree to an extent, I also think it’s a waste of time. I know it’ll cost me about $6,000 cash, $8,000 in opportunity cost, and two years to finish my degree in Applied Science with a concentration in Business Management. I’m big on listening to and following sound advice, but I don’t know if going is the right decision. I don’t want to be the guy that fails because he didn’t listen, but I feel why wait to pursue my dream. Why spend my time in school studying when I can be working. I don’t know if I should go back to school next semester or just work, but I am leaning towards work. I’m leaning towards the continuation of establishing my credit and work history, building my capital, and increasing my knowledge instead.

    So, I’m not really looking for an answer to what I should do, but rather more insight, advice, or an opinion. I’m sure this isn’t a typical question, but if someone could spare a bit of wisdom, I would appreciate it.

    0Reply
  • Faith Blamon
    Rental Property Investor · Philadelphia, PA · Member since 2019 · 7 posts · 2 votes
    7y

    @Frank Patalano I have very little funds to get started and am unsure of how to get my foot into the door to get a property

    0Reply
  • Jerome Patrick Jr
    Rental Property Investor · Virginia Beach, VA · Member since 2019 · 12 posts · 5 votes
    7y

    @Frank Patalano the contract element and understanding creative financing.

    0Reply
  • DeJuan Robinson
    Member since 2019 · 1 post · 0 votes
    7y

    @Frank Patalano lack of knowledge and confidence within myself that I can complete my first deal.

    0Reply
  • Malik Eleby
    King Of Prussia, PA · Member since 2019 · 22 posts · 0 votes
    7y

    @Frank Patalano Finding the money

    0Reply
  • Frank Patalano
    OP
    Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Steven Lowe:
    Originally posted by @Frank Patalano:

     Write an offer on every opportunity. Just offer what you think that it is worth. It doesn't matter if it is too low. 

    Where are you finding your opportunities?

    That's what I have always done, sometimes we end up lowballing though and it means I need to sharpen my underwriting skills.  Currently finding opportunities via brokers.  They keep bringing me deals that don't make a lot of sense, or I have to react in less than 24 hours and it's difficult to turn it around that quickly.  

     Have you thought about Marketing directly? The best deals are the ones that you find yourself.

    We are near or at a market top in most areas of the country. If you are part of a REIA ask someone with experience to look over your underwriting. Your numbers may be fine and the other offers are crazy.

    0Reply
  • Frank Patalano
    OP
    Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Copeland Duhon:

    The fear of making a mistake so big that I put my family in a financial bind. I have a wife and 5 kids so the pressure is strong.

     I understand. I still make mistakes in Real Estate here or there. There is no perfect deal. There are always risks. You have to pick the best opportunity that you can find and go for it.

    0Reply
  • Frank Patalano
    OP
    Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @David Brizendine:

    @Frank Patalano
    What's holding me back is not having my own money. I have a dozen people ready to invest with me but I don't know how to package property to show why they should.

     I would try to do something small with one or two partners. Once you have made money, you have proof of concept. That will cause other investors to want to invest.

    0Reply
  • Une vrai Liberte
    Rental Property Investor · Port Saint Lucie, FL · Member since 2019 · 17 posts · 0 votes
    7y

    @Frank Patalano I did purchase my house 2 years ago using the first time home buyer program which is another loan on the house that I didn't know until last week( condition live in there for 5 years and the debt will be forgiven).

    I tried to start my flipping business in Porr Saint Lucie but couldn't get an heloc on my own house and personal loan are too expensive and too risky while It will be my first start. I did all the research AND all the study possible but money ain't coming easily for me to start the process. Reaching out to my grandparents so they could take an heloc on their house so I can start because I do not want to pass on real estate. P.s: Do have plenty money but all are stuck in my stock market investment and wouldn't be wise to sell them all and place all this money in 1 basket. Wish me luck...

    0Reply
  • Frank Patalano
    OP
    Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Account Closed:

    Thinking that there’s an ideal salary and a ideal amount of money needed to be saved to invest. It’s making me think to much on choosing a career path from a financial standpoint rather than me doing something that I enjoy doing.

     There is not a perfect place to start from. Just start small and keep moving forward. I know people that bought their first house at a minimum wage job. Rich Dad did not say, I can't afford it. He said how can I afford it? Be creative.

    0Reply
  • Frank Patalano
    OP
    Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Account Closed:

    @Frank Patalano

    For me, it’s not really a matter of taking action, but rather a choice on which route to go.

    So, here is a brief summary of me and my situation;

    I’m a 21 year old kid from Michigan, currently netting $32,000/yr from two different jobs, plus an additional $3,000-7,000/yr from side hustles. (I’m a chef, and I help maintain an 80,000 sq.ft. office building. I do property maintenance.) I’m able to save at least 65% of my total income a year. My desire is to be a landlord and to invest in real estate. I have a mentor that I work with everyday who has the connections and experience in real estate investing. He’s no Grant Cardone, but he has flipped 6 condos in the past year and currently owns two rental properties. His gig is flipping. God willing, mine will be renting. I do not own any properties yet; but currently, my credit score is 710, I only have $10,000 for reserves, and my knowledge of this industry is broad. So, I have a couple more years before I’ll be ready to purchase my first investment property.

    However, my advisers believe I should finish college, so I’ll have an education and a better chance at an entry-level job in the years to come. They believe I can then use that job to fund my ambition, plus have a degree to my name. While I understand their point of view and agree to an extent, I also think it’s a waste of time. I know it’ll cost me about $6,000 cash, $8,000 in opportunity cost, and two years to finish my degree in Applied Science with a concentration in Business Management. I’m big on listening to and following sound advice, but I don’t know if going is the right decision. I don’t want to be the guy that fails because he didn’t listen, but I feel why wait to pursue my dream. Why spend my time in school studying when I can be working. I don’t know if I should go back to school next semester or just work, but I am leaning towards work. I’m leaning towards the continuation of establishing my credit and work history, building my capital, and increasing my knowledge instead.

    So, I’m not really looking for an answer to what I should do, but rather more insight, advice, or an opinion. I’m sure this isn’t a typical question, but if someone could spare a bit of wisdom, I would appreciate it.

    Thanks for sharing your story. 

    Here is my opinion after hearing your story. I could be wrong.

    Markets run in cycles. Degrees don't. Finish the degree. I used my job to finance my purchases and my w2 to make the banks happy on many loans. That will allow you to also grow some passive income. 

    Another way to think about it is that it give you a run way for your take off.

    Make your side hustle real estate. Network, Educate. Look for needles in haystacks. 

    Set goals and habits. Some will be easy, some hard.

    Househack? Live in and rent the rest. Whether it is a multi or single (rent bedrooms).

    0Reply
  • Frank Patalano
    OP
    Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Faith Blamon:

    @Frank Patalano I have very little funds to get started and am unsure of how to get my foot into the door to get a property

     If you have decent credit you can buy a single or small multi with 3.5% down. 

    You could also partner.

    0Reply
  • Frank Patalano
    OP
    Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Jerome Patrick Jr:

    @Frank Patalano the contract element and understanding creative financing.

     Are you wholesaling? You put a house under contract. Then you sell the contract.

    There are online ebooks and courses on wholesaling. Than Merrill wrote a book on wholesaling.

    Creative financing. You just have to start considering different possibilities in your head. Start with the mindset of "How can I afford it?" 

    There is an author named Chuck Sutherland who wrote a few books on Creative Financing.

    0Reply
  • Frank Patalano
    OP
    Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @DeJuan Robinson:

    @Frank Patalano lack of knowledge and confidence within myself that I can complete my first deal.

     Knowledge and Confidence can both be built.

    Set goals to read everyday and listen to podcasts. 

    Make sure you read books on real estate but also motivational books as well.

    Failure is ok. I have lost money a few times in real estate myself.

    0Reply
  • Frank Patalano
    OP
    Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Malik Eleby:

    @Frank Patalano Finding the money

     You really didn't give me enough info on your situation. 

    You can borrow money from the seller. Friends. Relatives. Etc.

    If you find a great deal the money will come or you will at least get creative enough to make it happen.

    0Reply
  • Frank Patalano
    OP
    Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Une vrai Liberte:

    @Frank Patalano I did purchase my house 2 years ago using the first time home buyer program which is another loan on the house that I didn't know until last week( condition live in there for 5 years and the debt will be forgiven).

    I tried to start my flipping business in Porr Saint Lucie but couldn't get an heloc on my own house and personal loan are too expensive and too risky while It will be my first start. I did all the research AND all the study possible but money ain't coming easily for me to start the process. Reaching out to my grandparents so they could take an heloc on their house so I can start because I do not want to pass on real estate. P.s: Do have plenty money but all are stuck in my stock market investment and wouldn't be wise to sell them all and place all this money in 1 basket. Wish me luck...

     Find a partner. Work together to get a deal done.

    Join your local real estate group.

    Try wholesaling a deal instead of flipping.

    Get credit lines at Home Depot and Lowe's.

    I wouldn't do a HELOC on your grandparents house. That is riskier then selling all of your stock.

    If the market goes bad I would rather have lost my stock account than lost my grandparent's house.

    0Reply
  • Scott Blumenthal
    Boca Raton, FL · Member since 2019 · 1 post · 0 votes
    7y

    @Frank Patalano I live in south Florida which seems over priced, high insurance, and lots of investors to break in ? Thoughts?

    0Reply
  • Nick ScapellatiPro Member
    Lender · St Augustine, FL · Member since 2019 · 58 posts · 12 votes
    7y

    @Frank Patalano for me I am brand new to this and I think it is in my belief that I can succeed. My lack of belief probably stems from lack of knowledge and understanding of all the moving parts. I am learning and sooner or later I will take the leap of faith.

    0Reply
  • Frank Patalano
    OP
    Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Nick Scapellati:

    @Frank Patalano for me I am brand new to this and I think it is in my belief that I can succeed. My lack of belief probably stems from lack of knowledge and understanding of all the moving parts. I am learning and sooner or later I will take the leap of faith.

     Most people start very motivated and then don't take the actions to extend forward momentum.

    Set Goals and habits.

    Read everyday. Listen to a podcast everyday.

    After you figure out what type of real estate that you want to do, modify your goals.

    0Reply
  • Reginald Wilson
    Rental Property Investor · Columbus, OH · Member since 2019 · 19 posts · 14 votes
    7y

    In contract for my first property. What was holding me back? The fear of not knowing everything/ lack of networking. Hopefully next year or soon I can pick up another @Frank Patalano

    1Reply
  • Frank Patalano
    OP
    Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Scott Blumenthal:

    @Frank Patalano I live in south Florida which seems over priced, high insurance, and lots of investors to break in ? Thoughts?

     South Florida is cray cray. At the same point, people are making once in a lifetime deals every week. You've got to find needles in a haystack. 

    Keep educating yourself and networking. Go to group meetings every week.

    You could look in other parts of the country as well. When there is a great deal jump on it.

    0Reply
  • Frank Patalano
    OP
    Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Reginald Wilson:

    In contract for my first property. What was holding me back? The fear of not knowing everything/ lack of networking. Hopefully next year or soon I can pick up another @Frank Patalano

     Hey listen, I don't know everything and I've been doing this for 10 years. I don't even know 10% of everything that you "need" to know about Real Estate Investing. That is what I have partners and team members for.

    I also network every week. That is how I find most of my deals.

    1Reply
  • Steven Lowe
    Real Estate Agent · Scottsdale, AZ · Member since 2019 · 448 posts · 320 votes
    7y
    Originally posted by @Frank Patalano:

    Have you thought about Marketing directly? The best deals are the ones that you find yourself.

    We are near or at a market top in most areas of the country. If you are part of a REIA ask someone with experience to look over your underwriting. Your numbers may be fine and the other offers are crazy.

    I haven't done any direct marketing and have no idea where to start with it but I like the idea.  

    0Reply
  • Luke Saglimbeni
    Rental Property Investor · East Longmeadow, MA · Member since 2019 · 154 posts · 64 votes
    7y

    I checked a few out a few years back as well, had a few under contract and discovered messes at inspection.  I do remember big companies buying  up the neighborhood.  I also remember 5 colleges in a short mile radius.  Send me a message if you're interested in partnering or lending for that area.  I need boots on the ground there if something pops up.  

    0Reply
  • David Kyle II
    Pensacola, FL · Member since 2016 · 6 posts · 0 votes
    7y

    Initial financing. I've been studying strategies for years, and I have even learned a trade (electrician) to help with repairs and maintenance of my rehabs.

    0Reply
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