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 Guidance, I probably need a mentor. It’s scary and all of the worry is self inflicted. It would help to have a clear starting point.
Join your local REIA. Over time you can probably find a mentor. I wouldn't ask during the first 2 meetings. Find a few of the busier people and ask to help them. If you help them they will help you later.
@Frank Patalano overpaying for the property. I am looking to buy and hold for rental. I am reading “BP: investing in rental properties”. Trying to educate myself. Still haven’t found the process to find good deals. Must read more I guess.
Knowledge about the process. There are so many working functions that is does get a bit overwhelming. My other problem is funding. Getting out there and raising the funds to me is a whole other beast. Yes, there are plenty of ways to raise money. Yes, I've read how to go about it. As a beginner who just starting out, knowing who will work with you and who will be against you is all to real. time is always a factor from start to finish. In a nutshell, just crossing that start line and asking myself "do I know enough to get in this?" is what's holding me back.
I am a sophomore in college, trying to find internships and a stable income. Though I have enough (majority in the stock market) to buy a very cheap SFR, I feel that I should continue saving for something a little better. I would appreciate any advice for the situation I am in.
I am also looking to find a mentor or seasoned investor, who I would be willing to do free work for in exchange for knowledge (what beginner isn't!). Any advice on how to find one?
@Frank Patalano overpaying for the property. I am looking to buy and hold for rental. I am reading “BP: investing in rental properties”. Trying to educate myself. Still haven’t found the process to find good deals. Must read more I guess.
Reading is important but it's not everything. You have to be out there networking. Meet up with people. That is how I find most of my deals.
Knowledge about the process. There are so many working functions that is does get a bit overwhelming. My other problem is funding. Getting out there and raising the funds to me is a whole other beast. Yes, there are plenty of ways to raise money. Yes, I've read how to go about it. As a beginner who just starting out, knowing who will work with you and who will be against you is all to real. time is always a factor from start to finish. In a nutshell, just crossing that start line and asking myself "do I know enough to get in this?" is what's holding me back.
I've been doing this for a while and I still learn new things all the time. I joked that one of my mentors has forgotten more than I've ever learned. If you're reading, keep doing that. If you're networking,working, keep doing that.
If you haven't looked at many properties, start doing that. When you find something that might be a deal it will motivate you to learn about what you still need in order to make it happen.
I'm not sure what you mean about who will work with you and who will work against you. Investing is a team sport. If you're around like-minded people they are pretty willing to help you. Many people stop helping you if they feel that you are either taking advantage of them or are not willing to bring anything to the table.
I often don't help people that just say they want a Mentor. But if they start out with how can I help you that means they are willing to give and take.
I am a sophomore in college, trying to find internships and a stable income. Though I have enough (majority in the stock market) to buy a very cheap SFR, I feel that I should continue saving for something a little better. I would appreciate any advice for the situation I am in.
I am also looking to find a mentor or seasoned investor, who I would be willing to do free work for in exchange for knowledge (what beginner isn't!). Any advice on how to find one?
Thank you!
- Jaycob Walker
If I were you I would find an inexpensive house in a decent area and house hack it. If it's a single-family rent out the other bedrooms. My wife and I wasted too much time or early on looking for a big, perfect house.
I love how you going to work to get Knowledge from a mentor. The best place to find a mentor is at your local REIA. Don't even mention looking for a mentor at the first meeting. Go to a meeting or 2 and find out who some of the bigger players are. At the third meeting start to ask them if there is a way that you can help them in their business. When you help them, most of the time they will help you in return.
I am still learning and reading as much as I can. Also finances, And getting personal stuff in order, to pay off some debt.
From what you're telling me, it doesn't sound like that stuff is holding you back. There's nothing wrong with doing some learning before jumping into real estate. Just set some realistic goals on want you want to accomplish before you take the leap.
I spoke to two people the last week who had a good amount of student loan debt and still bought their first house hack. They said it was the best decision they ever made.
Finding deals at the moment. Starting to look out of state for the first time ever
At this moment I feel it most markets are overheated throughout the country. Everyone is taking The Grass Is Always Greener philosophy. I'm not saying to not look out of state but I feel you should be focusing on wherever your teams are strongest. We have started to look at a number of out-of-state properties ourselves but since my connections are strongest at home that is where most of our deals are happening.
Maybe take a weekend and fly out to that area that you want to invest. Meet a couple brokers, a property manager or two. See if you can make it around the time of the local reia meeting
Awesome! The problem is that I live in San Jose, CA, so finding any MFR in my price range, and anywhere near my school, is near impossible. With that said, is your advice the same?
Great advice regarding a mentor. I will be sure to attend a meeting!
What is holding us back at this point in time is funding. My wife and I started our company a year ago, and have one rehab/flip deal in the works, but now we are hitting a wall with funding for our second deal. Unfortunately, my wife is getting frustrated. We have the education and backing of systems, so the paralysis is not the issue. Money is.
Why can't you guys partner on the second deal? Sharing the profit is better than no profit at all.
Well, we haven't found anyone that will vc a deal, and a majority of the HML's we find want a PG, 20% down and a minimum of three months reserves in the bank, 2 months of business bank statements, along with us having done at least three deals. Or they want us to have been in business for over a year, etc.
We are a new business. Our LLC was finalized in July '18, have one PML funded deal we are rehabbing in Arizona, our FICO was 680, but since we recently refinanced our home, have not made a payment yet, our scores are in the low 6's. Oh, and we only have $50k from my wife's solo401k.
Any and all assistance would be greatly appreciated and accepted.
Awesome! The problem is that I live in San Jose, CA, so finding any MFR in my price range, and anywhere near my school, is near impossible. With that said, is your advice the same?
Great advice regarding a mentor. I will be sure to attend a meeting!
Thank you,
- Jaycob Walker
You can house hack a single family. Put a lock on your bedroom door.
Hi Frank, all that you have mentioned is what I have been doing for the past month. I am getting pretty ok with the practice while still learning. The reason I said there are people that will work against you is because as a new investor, there are people out here with the wrong intentions. lucky, I'm seeing it from the sidelines through others who are going through this also. Awareness is key. I fully understand the give and take method. Since I have not found out what I can bring to the table yet, that maybe my ultimate prevention from going forward.
What is holding us back at this point in time is funding. My wife and I started our company a year ago, and have one rehab/flip deal in the works, but now we are hitting a wall with funding for our second deal. Unfortunately, my wife is getting frustrated. We have the education and backing of systems, so the paralysis is not the issue. Money is.
Why can't you guys partner on the second deal? Sharing the profit is better than no profit at all.
Well, we haven't found anyone that will vc a deal, and a majority of the HML's we find want a PG, 20% down and a minimum of three months reserves in the bank, 2 months of business bank statements, along with us having done at least three deals. Or they want us to have been in business for over a year, etc.
We are a new business. Our LLC was finalized in July '18, have one PML funded deal we are rehabbing in Arizona, our FICO was 680, but since we recently refinanced our home, have not made a payment yet, our scores are in the low 6's. Oh, and we only have $50k from my wife's solo401k.
Any and all assistance would be greatly appreciated and accepted.
Jeremiah
You are using alot of acronyms.
#1 You are doing a rehab now. 1 deal at a time is fine when you are starting out. If you find more deals, wholesale them.
#2 Those Hard money lenders are ridiculous. I've never had one ask for a bank statement. Keep looking for lenders.
#3 $50K is more than probably half of the people in the US population have in retirement accounts.
#4 If it is a good enough deal plenty of people will come. Every week I have people begging me to borrow their money. Or begging me to partner with them on a property.
Hi Frank, all that you have mentioned is what I have been doing for the past month. I am getting pretty ok with the practice while still learning. The reason I said there are people that will work against you is because as a new investor, there are people out here with the wrong intentions. lucky, I'm seeing it from the sidelines through others who are going through this also. Awareness is key. I fully understand the give and take method. Since I have not found out what I can bring to the table yet, that maybe my ultimate prevention from going forward.
All great investors were able to find time, experience, and/or money. You can offer them time. Do errands. Visit properties. Write up offers. Try to help others.
@Frank Patalano What used to hold me back was overthinking and over analyzing all of the “What Ifs”. I’m not embarrassed to say that I was also worried about other people (family and friends) telling me that I was wrong to put my money and efforts into real estate because things always go wrong and it’s “too risky in their opinion”. I no longer let any of those thoughts or emotions control my decisions. Now, I seek advice from seasoned RE professionals within my network, make calculated decisions, and pull the trigger quickly when I see an opportunity. No room for tiptoeing and being indecisive in RE.
I’d say financing. I don’t have a large down payment, and I live on the west coast. 10% down on a modest $250k property is going to be $25k, excluding closing costs. Also, the market in my area is super hot and people are overpaying like crazy, so I don’t think negotiating seller financing would get me a good deal. I’m not quite sure how to overcome that obstacle. I’d love anyone’s advice/experience on how they got around this one.
@Frank Patalano Thanks for the encouragement! I have an LLC (which you're absolutely right about as I did est. it on my own in 1 day) but need/want to separate the assets. I was advised a long time ago that the s-corp was best . I'll have my research done and this completed before the end of the qtr. #nomoreexcuses #allexecution #now
At the moment by obstacle is my age; I'm 16 years old and therefore I do not have capital to play with. Another thing is that I currently live in europe, and from what I've heard, there is alot red tape involved with real estate investing in Europe.