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.
@Frank Patalano
I had this question stuck on my mind for a few months now . I discovered real estate investing in late December And have been hooked on ever since. I’m holding back on two reasons 1) I want to make sure I know what I’m doing , so in order for me to “pull the trigger” I want to educate myself as much as possible. I am currently reading Brandon Turner’s book “ investing in real estate with no and low money down”. Few days ago I’ve finished rich dad poor dad and I am gaining momentum ( confidence) as I go with educating myself.
2) I am intimidated by my market. I am in NYC ( the Bronx ) to be specific and everything in my area is between 300-800k. What would you recommend me doing first as a new investor so I can FINALLY pull the trigger and be on my way to finacial freedom ?
@Frank Patalano I’m transitioning out of a 20 year career in IT, and have made unwise decisions in the past 3 years that have caused me to have to completely rebuild my life. I haven’t pulled the trigger yet, because I’d have to use OPM even to get started. I only need a few decent wholesaling deals, and I’d be on my way!
@Frank Patalano getting replies on here lol jk
But I’m in the military and new to real estate so I’m saving up for a down payment while learning as much as possible .
Chance, being in the military puts you in an excellent position for REI. First, depending on rank and your command, you could be getting BAH which could be paying down a mortgage. Second, you have access to a VA loan with a low interest rate and possibly no down payment.
Instead of living on base, you could be doing what many in the military have done and I wish I had learned long ago, and let the power of your service benefits catapult you into real estate. Plus, though there is an expectation of being the primary occupant in the property to qualify for the VA loan, the loan can still buy you a 2-4 unit property. Also, as a service member you are expected to move every few years. That's when you can refinance and rent that place out and go looking for another.
There's a whole forum dedicated to military REI. I'd recommend asking some of our brothers and sisters in arms how they did it. Thanks for your service!In the time
Hello. And, thank you for this opportunity to share. Honestly, I'm new. And, my greatest fear is not knowing where to start, failure due to overpayment. Should I look local or out of the area/state. I'm literally trying to get over thus mental block
@Frank Patalano
Using money I have saved to pay off my mortgage on my current home. Or to invest in my first investment property? Ive been going back and forth because less monthly expenses is just as much as an investment as passive income.
For me, my biggest hold back was funding. Being from Canada I am really cautious of lenders. I have had several contact me and send me forms and say they will lend me the money, but how do I know these people are legit?
@Frank Patalano what a great question. 2 things, analysis paralysis as well as the continued disappointment of running the numbers for deals in CT as compared to out of state markets. I’m convinced that I’ll find that diamond in the rough if I look hard enough but the numbers, especially property taxes, as well as the fact that CT doesn’t seem to be landlord friendly, continue to disappoint. The fact that I’m an engineer doesn’t help the matter either ;-)
Yes. I love investing with Engineers because their analysis is very detailed. Ya, CT is hot. Where is your source for leads?
Thanks Frank, those are certainly motivating words. I have a few local friends that have experience flipping and doing buy and hold that have been holding my hands in terms of strategy and concept but they tend to stay local for returns that just don't make sense to me at least as compared to some of the out of state possibilities. I'm still looking to do my first deal and my market research has been limited to HomePath, HUD Homestrore, etc... Eventually I will need to source off market deals in the areas I feel might work best for me. Im Open for anything at this point...
That's awesome that you have friends willing to help. Keep to your numbers. Analysis paralysis is different than holding true to conservative valuations.
There is nothing wrong with not wanting to lose money. If you have reasonable expectations then you just have to look at everything until you get there. Your goal should be to analyze a certain number of properties per week. It's better to pass on the wrong deal then to bend your own rules to make it work.
@Frank Patalano
Well, 1st let me say this is my 1st post and I’m new to the site. I was at a Fortune Builders seminar in the MA area over the weekend to learn more about this. My good friend and I brought our young adult children with us to see what they could learn as well. I have my real estate license and my friend did a flip on his own maybe 10 years ago. We’ve talked about doing this together.
While we did learn a few things at the seminar, we were not signing up for the Mastery program. Just too much money. But that is what led me to this site as it was mentioned in a few reviews on FB and I’m impressed with the knowledge and what seem like helpful people on the forums. This comes in to play at the end of my answer.
Now, your question as to what is holding me back? Well, fear of the unknown. Will we succeed? Will we fail? How will be get the money to do it right? You name it, the fear of “it” has come to my mind. While I did feel more confident at times during the weekend seminar, I also felt less confident too. Would I succeed without their coaching? Who would guide us to make sure we got a good deal? What about all of the tax strategies they would teach us?
So I guess it all boils down to fear vs confidence. I’m glad I have a friend to learn more about this with and jump into it together. But I want to do it right and not just “think” I know what I’m doing. This past weekend in the seminar helped me but also put some fear in my head to do it without their coaching.
-Mike
Fear of the unknown happens to everyone. I'm glad that you didn't buy the seminar as long as you can give yourself goals to make things happen. My best suggestion for you is to join a local monthly REIA. That is the best way for you to motivate, educate, and duplicate as an investor.
It's a ways away but you ate always welcome to visit the Rhode Island group. There are closer ones. Good luck.
@Frank Patalano fear and not knowing everything in case something goes wrong. Also, lack of funds.
Those are some big things to overcome. #1 You will never know everything. I don't in real estate nor do I plan to ever be able to. Even experts screw up all of the time. I do have experts on my team to help reduce risk but not eliminate it. Fear of the unknown is fine. A little fear can be a good thing. It puts risk into perspective. The worst deals that I have made are the ones that I had no fear. The money one can be a big problem. If you really want to be a real estate investor you're going to have to sacrifice something to get there. I sacrificed in some ways for years to get going.
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?
@Frank Patalano
That is a very important question. There are several things that will delay action in making that first purchase. The first, is the fear, whether it is fear of failure or fear of success. It could also be fear of change and leaving that comfort zone.
Second, is an important one, it is the lack of knowledge about the business. Some will spend a lot of time educating themselves before even attempting to take that important step of taking action. Many people try to make sure everything is perfect before they take action and we know that nothing is ever perfect. The task of looking for that perfect scenario can sometimes lead to analysis paralysis. Some people may even get caught in that scenario for years before they decide to take action, or they may decide not to move forward because it has been so long and nothing happened.
Third, is the access to capital. The newbie’s who were not exposed to any form of, or category of the real estate industry prior to deciding to become an investor, may wonder about how and where to find the cash flow to make the purchases. After some research is done, then the information arises that there are many ways to access funds through private money but that person still needs to get access to the funds by building relationships. That may still take some time but the process has been streamlined by the creation of BiggerPockets to guide us newbies through the process.
The newbie still has to go through the tasks of visiting the local meetings, Bigger Pockets meet ups and other networking events to form the relationships with investors, private lenders, brokers, realtors, property managers, accountants, lawyers etc. After all those things are done then the newbie has to do the most important part of the action plan, which is find the property to be purchased.
In my opinion, these are a few of the reasons that answers @Frank Patalano's question. Some people will work through these one by one, while some may do them all at the same time. The one thing that I believe will help newbies take action is the guidance provided by those that already have the experience. It goes a long way in the development of the newbies and I am sure is very, very, very much appreciated.
Thanks for a good summary of my first 300 comments. This teacher gives you an A-. Successful investors must have available resources in at least one of the following: Time, Money, Experience/Knowledge.
@Frank Patalano, I have enough money to invest, and I'm not sure where I want to invest it. We were under contract for about a week on a SFR we were paying $16k cash for and would likely put another $15k into. It would likely rent out on a government program for $800/month, and it was in one of the worst areas of our city. The occupant has to participate financially, and it's our responsibility to collect it. Neither of us was comfortable, and we didn't know how long it would really take to rent. Ultimately, we let the deal fall through on inspection contingency.
Now, we're looking at maybe a duplex in the $400,000 range. We'd finance some, but it would provide us a steady income. We could also buy two $200,000 duplexes or 1-4 $100,000 SFRs. Do you see? I could probably make it work no matter which route I went; I just am held back by the understanding that once I spend money, I won't be able to spend money again for a good while (buy and hold), or even worse take a haircut because I don't want to be in a situation that I got myself into. There are too many options atm, I think.
I see that you have many options. Basically you need to analyze them and just pick the one you think will be the most profitable for you. Pick one and commit to it. If there's something wrong during the inspection process that's one thing but don't bail out next time if nothing major is seen. You have to start to own something to build your experience and knowledge as an investor.
I am making progress, but not at the speed that I would like. I am house hacking a duplex and rent out a SFR. There are a couple of things holding me back from making faster progress and all of them are me. I am probably going to butcher this, but on the podcast, Brandon talks about building a tower and then halfway through the build you get sidetracked and start a new tower from scratch. I look around and I have so many half-built towers that are taking up my time, energy, money and focus. I find myself "busy" trying to do everything at once and I am in the process of shedding all the nonsense and putting more focus into real estate. It is testing my patience and persistence. I have to keep reminding myself that "perfect is the enemy of good."
@Frank Patalano
I’m in a small county called Lackawanna County.
There don’t seem no cash buyers in this area. And almost every one owns his/her property and it takes times to sell a property in this area.
It’s more a buy and hold area.
I wanna do wholesaling deals.
Any recommendations?
Or is it analysis paralysis?
If you are buying cheap enough you are bound to find cash buyers. Are you going to your local REIA?
@Frank Patalano getting replies on here lol jk
But I’m in the military and new to real estate so I’m saving up for a down payment while learning as much as possible .
Keep stocking up on that knowledge. Be ready to house hack that first one as soon as you can.
I'm excitedly viewing properties but so far, I think the realtors that are sending me things are sending me properties that are more suitable on the retail market, and for those that I've found as an opportunity, I'm having difficulty finding private buyers (not franchisees) to work with. My marketing so far is yielding a lot of phone calls that are not producing the outcomes I'm aiming for. Not giving up but trying to adjust my direction and find a way to better 'train' my RE Agents on the things to send my way.
@Frank Patalano For me, it is lack of inventory/good deals. The Chicago market seems to be pretty dry. I originally started looking at MLS about 6 months ago and there were a few good deals at that time. I wasn't ready but now that I am, it doesn't appear to be a good source right now. Most wholesalers are looking for cash buyers. I have seen some full gut rehab but have been reluctant to take on such a large project as a first timer. Too be honest, I really need a new strategy. Trying not to get discouraged.
It’s rather limitiations in mind not outside ✅
Think of investing like riding a bike for the first time. The real learning happens once you get on it and even more so when you fall off the first time. Hopefully you did not give up after you fell off the first time. I know that I didn't with bike riding and with investing.
Hi Frank,
This issue is not so the offer which I agree should be made based on current rents but whether we will be able to add value with rent increases if the market rent for the area is higher. Without knowing the market rent, we won’t know. The broker doesn’t know, rentometer and rent rage have a huge discrepency on this location and we have the trust issue with brokers and property management which are competing for the same type of properties.
Jeffrey
Everyone is different. When I look at value add projects I still base my offer on current rents. Will the property cash flow now? I can consider value-add opportunities on a property once I have it locked up under contract at a price I'm willing to pay for now even if I don't do any value add to the property.
@Frank Patalano I’m a be honest what’s holding me back from buying my first property is the fact that my credit score is super low and so is my income. However, I became a Pro member yesterday and I’m going to dedicate my time and effort into figuring this out. If you have some good advice for me I would greatly appreciate it.
@Frank Patalano Credit & Debt to Income Ratio
For me is fear of getting a property under contract and not being able to assign the contract. there are tons of properties I see that I would like to make an offer but have not yet done so for that reason. Also getting leads coming in consistently. I would like a mentor but they are very expensive. I am trying to do a wholesale deal on my own to save for a mentor.
@Frank Patalano
I had this question stuck on my mind for a few months now . I discovered real estate investing in late December And have been hooked on ever since. I’m holding back on two reasons 1) I want to make sure I know what I’m doing , so in order for me to “pull the trigger” I want to educate myself as much as possible. I am currently reading Brandon Turner’s book “ investing in real estate with no and low money down”. Few days ago I’ve finished rich dad poor dad and I am gaining momentum ( confidence) as I go with educating myself.
2) I am intimidated by my market. I am in NYC ( the Bronx ) to be specific and everything in my area is between 300-800k. What would you recommend me doing first as a new investor so I can FINALLY pull the trigger and be on my way to finacial freedom ?
I would be intimidated by NYC too. Do you own a home now? That will make a big difference in my answer. Also what is your current job? Without the answers to those two questions the only thing I will tell you is to make sure you continue educating and networking. You need to be out there meeting people in the local real estate world. I was just at a real estate conference in Brooklyn two Saturdays ago.
@Frank Patalano I have a full time business in New York City that needs my attention. I have access to wholesalers,financing, reliable contractors, but not time.