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.
I’m an expat, so my first investment property is going to be long-distance.
This is what’s going in my head:
I can never seem to finish researching, they all seem to contradict each other. I’ll do it my own way then, I found online tools to help me gauge different markets. Damn the country’s big.... which city do I choose....? I’m limiting myself to CAD 130,000 for down payments for a bunch of properties or 1, should I do 5% down and get more or 30% down and less... should I find something in a large city or 2 hours out? Will people even rent that far away? Let me research, ah, it seems like rent is really low that far... obviously... I was looking to make a bit more though... oh, there’s a blog post saying rentometer is not accurate and never to rely on it... ok so scratch that then... real rent prices will have to be a call at some point. Let’s just research more then. Damn! there’s an extra 25% tax for non-resident investors? I’ll need an accountant in my “core-4” to help me lower that... more like “core-5” now... Ok, so I need much bigger to breakeven then.... should I just buy an 8-plex? Which city though? Google “best city to invest in 2019”, ok... so number 1 is not a city I know at all... should I do it anyways? I need more research, maybe not an 8-plex to start, seems too big... maybe a triplex... oh seems like people are saying 2-3 multi families are way overpriced and that’s what beginners usually buy to get skin in the investing game, the competition is fears... maybe I should go bigger then, I have enough capital to outpace them.... maybe in the suburbs of that unknown city... do people even rent there? Is there even a bus that goes out there? What’s the local bus called and what’s the scheduling for work like from suburb of unknown, towards unknown? Damn! People in my imaginary building would have to wake-up at 4:30AM to get to work downtown of unknown on time... do they do that? Is it just a bunch of people staying and working at mom-and-pop shops...? No idea, how would I know that..? Eurgh, let me play a couple of games online of Rich Dad’s CashFlow to motivate myself... I win again... damn this game is too easy... maybe it’s a sign I’d actually be good at judging costs in real life...? No... that’s stupid, it’s a board game. Back to BiggerPockets podcasts.... ok, so this guy says go big or do nothing... so maybe 8-plex after all... another podcast... what the hell! Where do these guys find these $90,000 properties??? How old is this podcast? Do they invest 2 hours away from unknown cities too...? Screw it, should I just do it? We all die one day, and all this worry is useless, right...? Should I just jump into it already and screw everything? I won’t even remember all of this fuss once it all goes dark. No! What am I talking about?! I’m doing this so I DON’T fail, what am I thinking? I saved so much to mess it up even once! I’m doing it so I can quit this stupid job and spend more time with my unborn child, pass down wealth at some point! Ok, let’s just do it... start a long-distance team then... expat tax accountant emailed, check. Bank called, check. Now which city to choose my agent from...... eurgh.... Google “real estate investor advisor”....
If you’ve read this far, I salute you.
OMG. Your story is true, hilarious, and amazing.
Listen I don't care what you invest in. Commit to one type of property. BAM! No choice you have to buy that type. No turning back. Are you an engineer? I am still laughing at your paragraph. After you have committed to a type of property set up to only research 3 cities. Don't pick a top 5 city. Pick 3 in the the South or Southwest. Research them for 30 days. Period. Set deadlines and weekly goals. I don't give a **** if you lose a little money on your first deal. If nothing else that is how you will learn. Instead of sitting here in analysis paralysis hell. So in 30 days you will have committed to one type of property and one market. Now work the **** out of sniffing out every possible opportunity for another 30 days. See these steps are working. After 60 days you have committed a type of property, a city, and researched every deal that you can find. After that make offers on the 3 best options. If they all come back no deal so what? You've done more in 60 days then in all the time it took for me to read your paragraph and the 2 years that it took you to write it. Try offering on 3 more. Eventually you will get one.
In all seriousness, I wish you well. You have to make commitments and take action. Burn the boats or you will never succeed. If you don't like my idea then try crowdfunding or stick to the stock market.
If message me anytime. I want an update on this one.
@Frank Patalano I haven't made my first purchase yet, so my fears are getting money to purchase, getting that money at a good rate, finding renters, then managing that property or find a property management company.
@Frank Patalano Money and still working a full time job.... Also, not knowing exactly where to start...
@Frank Patalano I haven't made my first purchase yet, so my fears are getting money to purchase, getting that money at a good rate, finding renters, then managing that property or find a property management company.
You will get a much better interest rate if you house hack your first multifamily. If you plan on living in the rental you can buy with as low as three and a half percent down. If not I still would not be worried about the interest rate. I would just make sure you're buying a property that can cash flow. If it's a good property at a good price you will not have a problem finding renters. The main thing is to get out there and do is take action. Look at a hundred properties. Then put an offer on one. After you have actually analyzed it.
@Frank Patalano I haven't made my first purchase yet, so my fears are getting money to purchase, getting that money at a good rate, finding renters, then managing that property or find a property management company.
I'm a big fan of managing your first one yourself. It will give you a lot of experience. You might screw up a little bit but it'll still be worthwhile.
@Frank Patalano Money and still working a full time job.... Also, not knowing exactly where to start...
You're talking to someone who has more mortgages than fingers. I still have a full-time job. And a part-time job, scout leader, three kids, Etc. Money might be an issue for you but you can overcome it if you get a partner on your first deal.
I don't want to hear any excuses about working. If you aren't willing to sacrifice your dream of becoming a real estate investor will never happen.
Get out there and set goals. Try to do something real estate-related everyday.
If you don't know where to start pick two types of ways to invest and study them for one week. Then decide on one. Then decide on the type of property want to own. Give yourself one week to figure that out. Once you've made those decisions, commit to them. Then get out there and look at every single possible thing you can related to that type of property.
Taking action will lead to your success.
@Frank Patalano finances. As a father of 5 and husband to a stay at home mom, I’ve realized everything comes down to money. I don’t have a W2 job, but I have started a small construction company to make ends meet. It’s good but I need help. I’m always afraid to hire anyone because I’m afraid to have to lay them off if I get slow. Advice?
@Frank Patalano finances. As a father of 5 and husband to a stay at home mom, I’ve realized everything comes down to money. I don’t have a W2 job, but I have started a small construction company to make ends meet. It’s good but I need help. I’m always afraid to hire anyone because I’m afraid to have to lay them off if I get slow. Advice?
You grow from experience, other people's time, and other people's money.
If you hire someone you are helping them. Even it is only for a short time. Be honest with them. "I can use some help but I can't promise you anything permanent."
You need help. Get it.
That will make it easier for 2 men to feed their families.
Keep me in the loop. Good luck.
@Frank Patalano my hold back is I need to find investors. The way I’m designing these apartment deals will give them back x2 + their investments.
@Frank Patalano my hold back is I need to find investors. The way I’m designing these apartment deals will give them back x2 + their investments.
DM me what part of the country.
If you're looking for local investors the best way to find them as to go to local real estate groups. Get a property under contract. Have a carve-out that says subject to attorney approval. Or subject to partner approval for financing. Then go find some investors.
Thank you! I needed to hear that! I'll let you know in a week!
New to BP. Still trying to wrap my head around this and figure out how to best go about analyzing properties. I bought my first house about 3 years ago (so I don't qualify for the FHA loan anymore?). I live in a high cost of living area where property values are high.
I haven't committed yet; although, I need to make a change in my life. I have doubts that linger in the back of my mind that I won't be able to find any deals in my area or that I'm going to make a mistake and it's going to greatly disrupt my family's lifestyle. I'm also afraid that it's bad timing in the real estate cycle and I'll end up buying at a high and end up losing everything I've worked for in my life.
@Frank Patalano
I bought my first 4-unit in 2015, left my day job last summer, and have been rehabbing my property since. Money is holding me back. I need more education and to refinance for a down payment on the next building.
New to BP. Still trying to wrap my head around this and figure out how to best go about analyzing properties. I bought my first house about 3 years ago (so I don't qualify for the FHA loan anymore?). I live in a high cost of living area where property values are high.
I haven't committed yet; although, I need to make a change in my life. I have doubts that linger in the back of my mind that I won't be able to find any deals in my area or that I'm going to make a mistake and it's going to greatly disrupt my family's lifestyle. I'm also afraid that it's bad timing in the real estate cycle and I'll end up buying at a high and end up losing everything I've worked for in my life.
I understand your worries. Let's break them down.
I live in a high cost of living area. So I understand that frustration. Higher costs mean higher expenses but also higher rents.
Take it slow. Join a local real estate group. Meet with a buddy or two and try to partner on a first deal. Look at the properties together. Analyze together.
Don't worry about buying high. Just buy a property that can cashflow based on your analysis. Don't be crazy trying to make something work. Be creative but conservative. If the property can cashflow you can survive a downturn whenever that might come whether it is 5 months or 5 years from now.
@Frank Patalano
I bought my first 4-unit in 2015, left my day job last summer, and have been rehabbing my property since. Money is holding me back. I need more education and to refinance for a down payment on the next building.
Money might be holding you back but can you find someone to partner with. You have proven experience with the 4 unit and now you just need a money partner who wants to invest in real estate but can't because they don't have the time or the experience. You have strengths. Use them to your advantage.
@Frank Patalano
Knowing there’s so much I don’t know, and afraid I’ll overpay/overlook something and end up worse off.
My wife and I have been paying her college as she went, until she transferred to her 4-yr and that was no longer possible. We decided to use cash for tuition and basically putting overages on a 10% CC. We chose this over conventional student loans due to the speed we are paying the debt down and was about equal to student loans. We recently caught the REI bug and our CC debt has been paid down by just over 50% over the past 9 months. We've also curbed our spending.
We feel a lot better having the CC debt wiped and a few grand in the bank for our first deal. We are taking this time to turn the unknown into known before we jump in. We've made our first connection, for insurance, and plan on attending REI meets in the NoVA area and will invest in RVA.
@Frank Patalano
Knowing there’s so much I don’t know, and afraid I’ll overpay/overlook something and end up worse off.
Hey listen I have doing this for 10 years and there is so much that I don't know. You can't know everything. That's why you work with some partners that have other experiences.
When you make a offer, it can be subject to inspections. Then a professional can look through it with you.
Can you overpay? Yeah you could. But if you keep running analysis on different properties, it will give you practice for when you are ready for that offer. It is really all about the cashflow. If it can make money when you buy then it doesn't matter as much what happens to the market.
Maybe I'll make it to Ohio this year.
My wife and I have been paying her college as she went, until she transferred to her 4-yr and that was no longer possible. We decided to use cash for tuition and basically putting overages on a 10% CC. We chose this over conventional student loans due to the speed we are paying the debt down and was about equal to student loans. We recently caught the REI bug and our CC debt has been paid down by just over 50% over the past 9 months. We've also curbed our spending.
We feel a lot better having the CC debt wiped and a few grand in the bank for our first deal. We are taking this time to turn the unknown into known before we jump in. We've made our first connection, for insurance, and plan on attending REI meets in the NoVA area and will invest in RVA.
I like your strategy. This might be against what the gurus say but you really should have a few thousand in the bank for emergencies. Also I like good debt over bad debt anyday.
Keep doing what you are doing. Set goals and commit to do certain things every week, shoot everyday. Try to do 1 thing real estate related thing every day. 1 meeting or 1 30 minute reading session. Etc.
Meeting are a great way to network. I highly recommend it.
My wife and I have been paying her college as she went, until she transferred to her 4-yr and that was no longer possible. We decided to use cash for tuition and basically putting overages on a 10% CC. We chose this over conventional student loans due to the speed we are paying the debt down and was about equal to student loans. We recently caught the REI bug and our CC debt has been paid down by just over 50% over the past 9 months. We've also curbed our spending.
We feel a lot better having the CC debt wiped and a few grand in the bank for our first deal. We are taking this time to turn the unknown into known before we jump in. We've made our first connection, for insurance, and plan on attending REI meets in the NoVA area and will invest in RVA.
I like your strategy. This might be against what the gurus say but you really should have a few thousand in the bank for emergencies. Also I like good debt over bad debt anyday.
Keep doing what you are doing. Set goals and commit to do certain things every week, shoot everyday. Try to do 1 thing real estate related thing every day. 1 meeting or 1 30 minute reading session. Etc.
Meeting are a great way to network. I highly recommend it.
Thank you for the advice. We are working on it daily with audio books or podcasts during our commutes and watching videos when we get home. I actually just established our LLC a few minutes ago. I am going to work on knocking out some of the Agreements that all LLCs should have on hand, starting with the Operating Agreement. Couldn't get a FEIN due to the IRS system being down, given the date, not surprising. Just because you aren't ready to buy today, doesn't mean you should sit on the sidelines!
@Frank Patalano
Right now I'm held back from not having a tax return. I'm finishing up nursing school so once this June hits I plan to start working and build up my credit score. So hopefully at 20 I can buy my 1st multifamily property.
Would you have any ideas on a way to get a start with REI sooner?
As of now I'm just trying to educate myself and find a team (real estate agent, contractor, etc) to later on help me with a 1st deal.
Thanks for your time,
Charles O.
My wife and I have been paying her college as she went, until she transferred to her 4-yr and that was no longer possible. We decided to use cash for tuition and basically putting overages on a 10% CC. We chose this over conventional student loans due to the speed we are paying the debt down and was about equal to student loans. We recently caught the REI bug and our CC debt has been paid down by just over 50% over the past 9 months. We've also curbed our spending.
We feel a lot better having the CC debt wiped and a few grand in the bank for our first deal. We are taking this time to turn the unknown into known before we jump in. We've made our first connection, for insurance, and plan on attending REI meets in the NoVA area and will invest in RVA.
I like your strategy. This might be against what the gurus say but you really should have a few thousand in the bank for emergencies. Also I like good debt over bad debt anyday.
Keep doing what you are doing. Set goals and commit to do certain things every week, shoot everyday. Try to do 1 thing real estate related thing every day. 1 meeting or 1 30 minute reading session. Etc.
Meeting are a great way to network. I highly recommend it.
Thank you for the advice. We are working on it daily with audio books or podcasts during our commutes and watching videos when we get home. I actually just established our LLC a few minutes ago. I am going to work on knocking out some of the Agreements that all LLCs should have on hand, starting with the Operating Agreement. Couldn't get a FEIN due to the IRS system being down, given the date, not surprising. Just because you aren't ready to buy today, doesn't mean you should sit on the sidelines!
Nice job.
@Frank Patalano
Honestly, (sorry if im bringing this back from the dead) but money and knowledge..
I would love to take the leap as im newly married and a new father and i want to give my very supportive wife a better life and i want to make sure my 8 month old daughter doesn't grow up like i did. I have what i call the "what if" syndrom.. back when i was 18 (41 now) auto sound and security was a big thing, there was a school that certified you and i saw it as an opportunity to jump into a very lucrative industry, so i went to my father and told him bout the school, he said great and that he would pay for my education and then came the "what ifs"...... and ever since then, i think about it.. what if i fail, and now its worse because if i fail, i fail my wife and daughter, it's not just me anymore... so yeah.. basically im a chicken sh**. Lol
@Frank Patalano
Right now I'm held back from not having a tax return. I'm finishing up nursing school so once this June hits I plan to start working and build up my credit score. So hopefully at 20 I can buy my 1st multifamily property.
Would you have any ideas on a way to get a start with REI sooner?
As of now I'm just trying to educate myself and find a team (real estate agent, contractor, etc) to later on help me with a 1st deal.
Thanks for your time,
Charles O.
The only thing that a tax return will hold you back from doing is getting a traditional mortgage. You can do everything else in real estate without that. You could be wholesaling, looking at properties, bidding auctions for others, negotiating deals. Are plenty of things you could be doing.
Hello Frank,
What's holding me back from getting started is financing deals. I have good credit, cash reserves, but I'm unemployed right now, so traditional financing is not in the cards for me. Thank you for asking.
Sincerely,