So what's holding you back?
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?
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.
My main hang up is just getting started. I live in a very expensive area (NJ) and am having difficulty with finding that first property and getting the ball rolling. I initially had the goal of buying multi family and renting out the units, but even getting two units in an area like Jersey City will make no sense from the return standpoint. I was looking at $600-700k properties and not seeing huge upside from a cash flow/return standpoint after expenses are accounted for. I then completely changed my goal to be more in the fix/flip area and possibly in AirBnB, and that is where I currently am from a mindset standpoint.
I want to surround myself with as many like-minded people as possible and grow from there, whether it be by mentorship or forming partnerships that can lead to mutually beneficial goals being met. I have no doubt in my mind that I will do this and become successful at it, but having worked in corporate since 2006 and never really going away from that comfort zone, just finding that first property is the hold up.
Great topic by the way. Very insightful.
Are you going to house hack it? If so I would consider a triplex. Live in one. Traditionally rent the second one. Airbnb the 3rd.
When you were a kid you probably left that comfort zone pretty often. Or that might have been before you created that comfort zone. Take a little risk here or there. Not a lot. Jump off a porch. Not off a cliff.
No, I own a SF house that my wife and I live in (so not an investment). Any property that I invest in going forward will be purely as an outside investor.
Great quote about jumping off a porch instead of a cliff. The frustrating part is, I am ready. I have never been more ready. I have a business partner and we have made offers to multiple MF homes (we were outbid in all cases), but that was when I was focusing on renting out units. Now I have pivoted towards fix and flips (and Airbnb's). I have the capital and am ready to make the leap. I just need to find the opportunity, and that's a big reason why I joined this site. The old saying "luck is when preparation meets opportunity" is what I am going by. I am trying to learn as much as humanly possible about this business (I am in corporate finance/accting and have been since 2006) and hope that educating myself will make me ready for when an opportunity presents itself.
@Frank Patalano Finding the right mentor to help us get started, along with financing
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.
Now you are confusing me. Your profile says that you are from East Longmeadow. No? You would be the boots on the ground for Springfield, MA. I was trying to give you ideas of where to network in the area.
Right and thank you. I always kept student housing and Providence in the back of my mind too.
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.
I don't know the Pensacola market. If you have some time and rehabbing knowledge why don't you network with a partner who has money but no time. I've partnered on many deals.
My main hang up is just getting started. I live in a very expensive area (NJ) and am having difficulty with finding that first property and getting the ball rolling. I initially had the goal of buying multi family and renting out the units, but even getting two units in an area like Jersey City will make no sense from the return standpoint. I was looking at $600-700k properties and not seeing huge upside from a cash flow/return standpoint after expenses are accounted for. I then completely changed my goal to be more in the fix/flip area and possibly in AirBnB, and that is where I currently am from a mindset standpoint.
I want to surround myself with as many like-minded people as possible and grow from there, whether it be by mentorship or forming partnerships that can lead to mutually beneficial goals being met. I have no doubt in my mind that I will do this and become successful at it, but having worked in corporate since 2006 and never really going away from that comfort zone, just finding that first property is the hold up.
Great topic by the way. Very insightful.
Are you going to house hack it? If so I would consider a triplex. Live in one. Traditionally rent the second one. Airbnb the 3rd.
When you were a kid you probably left that comfort zone pretty often. Or that might have been before you created that comfort zone. Take a little risk here or there. Not a lot. Jump off a porch. Not off a cliff.
No, I own a SF house that my wife and I live in (so not an investment). Any property that I invest in going forward will be purely as an outside investor.
Great quote about jumping off a porch instead of a cliff. The frustrating part is, I am ready. I have never been more ready. I have a business partner and we have made offers to multiple MF homes (we were outbid in all cases), but that was when I was focusing on renting out units. Now I have pivoted towards fix and flips (and Airbnb's). I have the capital and am ready to make the leap. I just need to find the opportunity, and that's a big reason why I joined this site. The old saying "luck is when preparation meets opportunity" is what I am going by. I am trying to learn as much as humanly possible about this business (I am in corporate finance/accting and have been since 2006) and hope that educating myself will make me ready for when an opportunity presents itself.
Keep it up. Set goals and habits to push the momentum.
Read so much each day.
Network every week.
Make an offer on each property that you view. No matter how low, for how much you think that it is worth.
We find most of our deals through wholesalers and off market.
@Frank Patalano Finding the right mentor to help us get started, along with financing
A mentor is not a necessity but it is helpful.
Instead of a mentor look for a partner that you could share the financing with.
Keep networking until you find the right connection with someone else.
Thank you Frank for the advise. That is exactly what I intend to do. I have started using Brandon Turners 90 day goal routine to keep progressing in this business.
@Frank Patalano well I pull the trigger made an offer so I felt I was over the hump but it fell through and now I can't get realtors to show me property and now second guessing financing. Looking at pulling my small 50k in 457 to invest the cash into my self and the real estate. Silly?
@Frank Patalano
I'm saving money in a REIT and working on my credit to qualify with lenders.
I am ready to buy a property but I can't seem to find one. When I tell realtors I am looking for at least 10% ROI they send me properties above price range or can't find any properties matching that description. I'm starting to wonder if I am being unrealistic in this market or not analyzing the properties properly. I have the cash to buy and the motivation but not finding a property is holding me back. Any tips on finding a property or a good market to find them in are welcome :).
@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).
Thanks for your time and response frank, I appreciate it.
@Kris L.
I have just started reading / lurking this forum. I’ve been holding back all of my life and it’s time to stop. My current job has me in Southern California. I don’t want to invest here, haven’t been in the area long enough to find a niche. Property prices here are ridiculous, and I feel my only option is to do long distance for now. I’m originally from Central Ohio. I’m more familiar with that area , but am still afraid I’ll get stuck with a lemon in the areas I can afford to start out in. All of the research tells me that I should be OK, but the fear still rules. Anybody have a similar issue?
Ron B.
@Frank Patalano
The initial fear was finding funding. But after listening to Brandon Turner and David on the podcast and reading some books, and educating myself more, I ignored all fear and just did it. I wanted to be an “have” and not a “have not”. So very recently, my wife and I stepped off the boat, big time, and committed to a quadplex with a signed purchasing agreement. Now we are in that stage of praying for God to assist with bringing the funds needed so we can get started on this journey!
The Comfort zone has been holding me back for at least five years (Maybe eight!). Ten years ago I bought my first multi (2 family) at a short sale and BRR’d it before I even knew what that meant. It’s been pretty successful for me with both cash flow and appreciation. I’ve looked at hundreds of deals in the last eight or so years and have not pulled the trigger on buying another one although many deals have passed me by.
That is until listening to Brandon/David on bigger pockets and also You and Jimmy talking about the BRRR strategy on the Cash flow Kings. As of now we will hopefully soon be closing on a five unit deal- Off market- Owner financed (really close to a 2% deal!).
Having a solid Partner has been instrumental to me as well not only for analyzing deals but also for accountability.
The big question is what’s next? Find me the next deal I’m ready.
@Frank Patalano
Fear of not knowing enough about the business and not having the right system in place.
Fear can be reduced by getting more knowledge and getting closer to investors who are doing deals in your area!
With knowledge, fear has no place to hide.
@Frank Patalano I want to get started, but don’t have money and haven’t found anyone that has money to partner with or help me get started. I want to start with duplex’s. I am also in credit card debit and just bought my first home last year. I guess I just don’t know where to start. :(
When you are looking at what type of deal is a good deal and where is a good deal for you. I would say that you need to be very cautious in asking this question, the reason is this is the "HOW" part of investing which in my opinion is the 2nd part of the equation.
I think you need to focus on the first part of the equation which is the “Why”.
Focusing on “YOUR" goals and what you want as a result of owning real estate is the most important. Sit back and ask what and how your life will be impacted as a result of owning real estate assets. The result of owning is what?? is it cash flow, appreciation, 1031, pass down to family as a legacy, this is also what your exit strategy will be. Not many people think about the end goal and the exit strategy when looking at deals. I know because I was one of those people. I kept asking if a certain deal was a good or bad deal and would go with concensus of people and make my decision. However if I ever created goals and an exit strategy then I would have realized that these properties did not align with my goals. I think it aligned more with their goals which to no fault of their own, were not even close to my goals.
So my strategy (my “How”) did not align with my goals (my “Why”).. and this was disastrous for me.
Focus on the goal end destination. Then you build your strategy that’s going to get you to your goals it’s kind of like where you’re driving to is the end destinations and the freeways are the strategy that will get you there.
No one ever asked or advised me on this and it almost made me bankrupt. Don’t ask if it’s a good or bad deal, have your definitions and strategy set first. Then focus on the market / city that will get you to your goal based on the strategy. That’s my advice I give to owners and leads that want to buy or learn to buy investment properties, we manage thousands of properties and 50/60% of our clients are new to real estate or learning how to truly build wealth and do not live locally or in the same state or country. I always stress them knowing what is a good deal for them, not for me. To me that’s helping people build wealth, not just telling them to buy or not to buy.
Good luck to you
@Frank Patalano
How do I know if it’s a good deal? What’s the best calculators and strategies for home flipping?
@Frank Patalano I recently got into BiggerPockets podcasts and want to get going on real estate! What’s holding me back is I don’t know what type of property I want to find my niche in... suggestions on how to figure it out?
@Frank Patalano Can you go on more detail on buying the nine unit plex off market?
@Frank Patalano for me I feel like I’m super young. I just turned 20 and I’m a sophomore in college full time. I think I’m nervous that if I buy a investment property and it doesn’t go well then I’m screwed for the rest of my life.
@Mark Bommarito have you looked in Oklahoma?
@Frank Patalano
Scared I will fail or won’t do as well in my area as everyone else. I know it’s best to get out there and do it instead of dwelling on it but that is what’s holding me back.