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 not knowing what type of strategy to go with to initially try to get started
If you don't have a house, do a house hack. If you have time, do a wholesale. Set a goal to do one but take action.
@Frank Patalano for me being brand new to REI its twofold
1) education - I’ve been doing a lot of reading and listening to podcasts
2) lack of a network - being that I’m interested in investing out of state I have yet to build a team of people that I trust.
Just started looking what real estate events are in my area to try and tackle two birds with one stone
I've made a bunch of responses about it being all about Education and Networking. You should probably pick 3 markets, do research on all 3 for 1 month, then choose 1. After you have picked 1, set up a trip, meet a few brokers , drive neighborhoods, and go to a local real estate meeting.
@Frank Patalano
I'm going for a 203k FHA loan and unfortunately with their very stringent guidelines it will be almost a year before I can get approved. Planning to purchase a foreclosed duplex. Renovate with rest of loan and rent out extra unit (living in the other for the first year of course) and then after a year, refinance, use equity on first rental to put a down payment on next rental property (probably another duplex). Move out of first one and rent out the second unit. Go from there. My question is, being that I won't be able to actually start my investment journey until early next when I meet the guidelines, what can I do right now to keep me in the investment realm? Are there certain people in the investment world that I could reach out to for mentoring? Maybe part time work as property manager or just helping analyzing properties/searching for deals? I'd love to keep my motivation and knowledge on this career going but knowing I have a year before I can make any real investing moves is starting to hinder my motivation and accountability for myself. I know I could use this year to be that much more prepared but what exactly can I do other than read and watch videos?
Join your local REIA!!!!
Set goals and stick to them. Not sure if there is part time property management work in your area.
Keep analyzing deals. Try to buy a duplex with seller financing. Ask someone in the group if you can help them.
@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.
I don’t own a home as of now but I do hope to have my first investments property sometime this year. Since The NYC market is so expensive and competitive I am looking into wholesale deals in NJ and upstate New York. My current job is a courier ( independent contractor) work. Not a w2 job which allows me to have a flexible schedule.
So one strategy is to house hack your first property. Buy a 3-unit or 4 unit and live in one. Another thing to do is to wholesale in upstate New York. I used to live near Albany and Troy. There has got to be deals in the Fishkill market, etc. You could do flips as well. You know what your strengths are. If your strength is time then wholesaling is a great strategy. If you have time and some money then you could do more flips.
Thank you for the advice ! I will definitely take all of this into consideration and pull the trigger as soon as possible. I will definitely keep in contact and update you as I go.
Thanks so much for the good advice Frank Patalano! I will follow your advice!
Tina Brown
@Frank Patalano great suggestion.
For me as of right now - Finding a deal. But actually, I'd like to find a contractor before I find a deal as I believe that will help make finding a deal easier.
The way I see it is that I am more likely to find a deal already knowing what the contractor estimates for the rehab. I am physically unable to do the work, so I am in an fortunate scenario where I need to completely rely on the contractor.
I live in Brooklyn, NY and everything here is extremely expensive. I'm left with long distance investing and I'm having a hard time deciding exactly what city I should look into to buy my first property in.
@Frank Patalano
The duplex —four plex is way too expensive now in Houston. It’s our first time want to go for multi units instead of sfr but there is no way to get a positive cash flow there.
I haven't looked into Houston lately. That's sad. Houston has always been a good market. When you are analyzing the properties what source are you using?
I am having a license being a part-time investor myself. so I am using my own excel calculator, har, zillow, etc.
That's not what I meant. Sorry. Where are finding possible deals? All MLS?
MLS and some off-market notes. we have some local investor here sending emails out to whoever is interested. but of course, best deals requires you to be VIP
Yeah, MLS is a waste of time right now. But since you are finding nothing go back to MLS and look at stale listings. Why did they not sell? Is it a problem that you can fix?
Finding a property management company/team I can trust
Look for referrals in the area that you plan on investing. Join the local Real Estate Group. Find out who the other investors are using. I work with about 6 different management companies. I am not happy with 2 of them. I trust them but they are just not as good as the other companies. I am gradually moving away from the 2 that I am unhappy with.
@Frank Patalano
The duplex —four plex is way too expensive now in Houston. It’s our first time want to go for multi units instead of sfr but there is no way to get a positive cash flow there.
I haven't looked into Houston lately. That's sad. Houston has always been a good market. When you are analyzing the properties what source are you using?
I am having a license being a part-time investor myself. so I am using my own excel calculator, har, zillow, etc.
That's not what I meant. Sorry. Where are finding possible deals? All MLS?
MLS and some off-market notes. we have some local investor here sending emails out to whoever is interested. but of course, best deals requires you to be VIP
Yeah, MLS is a waste of time right now. But since you are finding nothing go back to MLS and look at stale listings. Why did they not sell? Is it a problem that you can fix?
that's a perfect point! and this is actually what I am looking now. I am trying to find DOM >60 or 90 days listings and the listings which has been terminated. I just sent an email to an agent this morning with a terminated listing earlier this year asking him if his client still interested to sell.
Thank you for pointing out this to me and now I have more motivation to do it
@Frank Patalano I feel like lack of money and fear of making a mistake make it difficult for me to move forward. I support a family of 5 off of my income alone and I'm afraid that if I take on this extra debt/risk it would hurt my family.
@Frank Patalano Finalizing our strategy. I have a little BP ADHD :-) Specifically, we prefer to invest in northern CA since we know the area, have most of our immediate family there, already travel there semi-frequently and my sister-in-law owns her own PM company and can manage our acquisitions which gives us a competitive advantage. The challenge is the current market dynamics, it's too expensive. We're considering going OOS to execute the BRRRR strategy but I want to be 100% sure that in/near Modesto is not an option before pursuing OOS and increasing our risk. That sums it up!
Whats holding me back. Thats a hard question. Because if you knew you would not want to continue to let it. I have a developed strategy that I believe in time will bring profits. The point is not to chase and fall in love with property, but to listen to what the numbers tell you. The areas I believe to have good potential have been flushed with over heated sellers market. The difficulty is to trust your metrics and investment goals you are seeking to reach. The margins are becoming slim in many areas and our offers have been exceeded in many cases to levels, where we cannot see the cashflow profits.
To look inward, you cannot blame the market, it will be what it will be. I could network more effectively, but it can be difficult when you are investing in out of state areas. I have recently shifted my focus to the growing foreclosure market and trying to take advantage of the increased supply in the market.
The moral of the story is stay committed and put in the hard work, deals will come and they will CLOSE.
I just started in real estate investing, formerly oil & gas Pro.... and after 100s+ of research hours in this business specifics, I did do 2 quick flips/buy sell last year. I have my first wholesale deal (5 lots) ready to go, and it's a distressed property with a very motivated seller- I'm a little anxious here lol.
I'm stuck at the moment on this wholesale bc I'm not sure if I have the right docs, right info?! (frustrating) One between seller and then one between buyer and me-Done! Right... I don't have a buyer yet or even know another investor, incl. a real estate attorney, a new excellent accountant/tax ...I have signed up for local "meet up" for these groups. But this is such an excellent deal I shouldn't have a problem selling at all.
I'd prefer to work with another professional or POSSIBLE mentor in my area to really be successful and make money, create a sustainable income, help others and enjoy as I learn this. I also have a commercial frontage I plan to develop- my goal. I just joined BP Pro a few days ago and this is my first post to reach out for some of my new community Pro support! ;) All advice welcomed.
Thanks, Glen
@Frank Patalano
Just don’t feel comfortable with calculating the deals even with the tools under BP. I don’t like just plugging numbers into something I need to understand how it is calculated and why it is calculated that way.
Download calculators from other sites. There are other calculators out there that explain the numbers differently.
Yes you must know some of the numbers. NOI, Cap Rate, etc.
Ask an agent is there are any properties for sale in your area that include profit and loss statements. Those numbers are not always accurate but it will be a start in your neighborhood with numbers that you can play around with and improve upon.
Ok...
Discovered a new block, hope someone can answer. Where does the money come from to pay the mortgage when you first buy the property but don’t have a renter? My answer would be to hold money in a bank account but how much? A years worth? Do you drop the price if it just doesn’t rent? How much and for how long? When do you know you’ve chosen the wrong property? When the bank forecloses?
@Frank Patalano proper guidance
For me as of right now - Finding a deal. But actually, I'd like to find a contractor before I find a deal as I believe that will help make finding a deal easier.
The way I see it is that I am more likely to find a deal already knowing what the contractor estimates for the rehab. I am physically unable to do the work, so I am in an fortunate scenario where I need to completely rely on the contractor.
Finding a contractor is very important. I got to be honest with you. I never lift an hammer on my properties. You should be asking around immediately for recommendations. I've gotten a lot of great people that way.
Fear that the market may correct and I don't if I am wasting my time trying to time the market.
I live in Brooklyn, NY and everything here is extremely expensive. I'm left with long distance investing and I'm having a hard time deciding exactly what city I should look into to buy my first property in.
Take a map and put a big circle that would be a 4 hour drive away. Pick 3 cities that you think that you might be interested in. Study those 3 for a month. Research job growth, population growth, etc. Pick the one that you like the best. Start to network in that market. Set up a couple of days to meet people and do neighborhood research. Make sure they have a local investor group going on during those days to network with locals. Look at a couple properties while you are there as well.
Set goals. Take action.
@Frank Patalano I feel like lack of money and fear of making a mistake make it difficult for me to move forward. I support a family of 5 off of my income alone and I'm afraid that if I take on this extra debt/risk it would hurt my family.
If you have any extra time (probably not) wholesaling is a large time/low money commitment.
Keep learning. The more you know that less fear that you will have. Education does not eliminate fear, but it helps.
@Frank Patalano Finalizing our strategy. I have a little BP ADHD :-) Specifically, we prefer to invest in northern CA since we know the area, have most of our immediate family there, already travel there semi-frequently and my sister-in-law owns her own PM company and can manage our acquisitions which gives us a competitive advantage. The challenge is the current market dynamics, it's too expensive. We're considering going OOS to execute the BRRRR strategy but I want to be 100% sure that in/near Modesto is not an option before pursuing OOS and increasing our risk. That sums it up!
I agree to stay local if you can, especially with your current network. If you do go out of state, try to get referral about managers in other areas. If you find someone that you can trust they will help you build a team when you buy there.
Whats holding me back. Thats a hard question. Because if you knew you would not want to continue to let it. I have a developed strategy that I believe in time will bring profits. The point is not to chase and fall in love with property, but to listen to what the numbers tell you. The areas I believe to have good potential have been flushed with over heated sellers market. The difficulty is to trust your metrics and investment goals you are seeking to reach. The margins are becoming slim in many areas and our offers have been exceeded in many cases to levels, where we cannot see the cashflow profits.
To look inward, you cannot blame the market, it will be what it will be. I could network more effectively, but it can be difficult when you are investing in out of state areas. I have recently shifted my focus to the growing foreclosure market and trying to take advantage of the increased supply in the market.
The moral of the story is stay committed and put in the hard work, deals will come and they will CLOSE.
Yes. Stay true to your numbers. If the market crashes at least you will be able to hold onto your cashflowing properties.
I just started in real estate investing, formerly oil & gas Pro.... and after 100s+ of research hours in this business specifics, I did do 2 quick flips/buy sell last year. I have my first wholesale deal (5 lots) ready to go, and it's a distressed property with a very motivated seller- I'm a little anxious here lol.
I'm stuck at the moment on this wholesale bc I'm not sure if I have the right docs, right info?! (frustrating) One between seller and then one between buyer and me-Done! Right... I don't have a buyer yet or even know another investor, incl. a real estate attorney, a new excellent accountant/tax ...I have signed up for local "meet up" for these groups. But this is such an excellent deal I shouldn't have a problem selling at all.
I'd prefer to work with another professional or POSSIBLE mentor in my area to really be successful and make money, create a sustainable income, help others and enjoy as I learn this. I also have a commercial frontage I plan to develop- my goal. I just joined BP Pro a few days ago and this is my first post to reach out for some of my new community Pro support! ;) All advice welcomed.
Thanks, Glen
You already done 2 deals in the last year. That is great. That is better than many. Wholesaling is even easier than flipping. You get a profit without even doing the rehab or in this case, a development. Keep networking. If it is a score, you will easily be able to find a buyer. Nice job. You got this.
@Frank Patalano
Just don’t feel comfortable with calculating the deals even with the tools under BP. I don’t like just plugging numbers into something I need to understand how it is calculated and why it is calculated that way.
Download calculators from other sites. There are other calculators out there that explain the numbers differently.
Yes you must know some of the numbers. NOI, Cap Rate, etc.
Ask an agent is there are any properties for sale in your area that include profit and loss statements. Those numbers are not always accurate but it will be a start in your neighborhood with numbers that you can play around with and improve upon.
Ok...
Discovered a new block, hope someone can answer. Where does the money come from to pay the mortgage when you first buy the property but don’t have a renter? My answer would be to hold money in a bank account but how much? A years worth? Do you drop the price if it just doesn’t rent? How much and for how long? When do you know you’ve chosen the wrong property? When the bank forecloses?
I would hold about 6 months of expenses before closing to pay for emergencies and vacancy. Beside that it would have to come out of pocket. Why would it not rent. You should know the expected rent before you buy. If it doesn't rent, yes you need to drop the price to just under market. Rent it for one year below market. That is why when you make the offer you put in a margin of safety in case your numbers are wrong. If you are that worried ask someone else who owns property to review the deal. Wrong property? If you are that worried about a property you better make a lower offer.