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?

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Jacob Gelinas

Providence, RI · Member since 2018 · 29 posts · 409 votes

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.

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Jesus Valverde
Albuquerque, NM · Member since 2019 · 5 posts · 2 votes
7y
Well I cant really consider my self an investor because I'm at the stage of the "hold back". I think it's a combination of lack of confidence as well as fear of failure. I talk to my wife about this all the time and I feel that although she supports me it also her fear that holds me back too.
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Frank Patalano
OP
Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
7y
Originally posted by @Josh Loayza:

@Frank Patalano
Hey Frank, I live in Las Vegas and I just started doing wholesale deals or at least trying to get my first deal done. I have had a couple of appointments and tbh I don't think I'm that bad when it comes to communicating with the sellers, I mean I know the lingo and how to do comps, use my title company to get prospects through NOD/NOS leads but I really think that I need a mentor/coach through this. I truly believe that I can become very successful at this but the lack of true mentors that I can go to and get advice from has hindered me from being successful. What do you think I could do to overcome this? Thanks
Just my thoughts so far.
1. the Nevada Market is pretty hot.
2. it doesn't sound like you have had enough meetings with the sellers. Have you sat down with 50 yet? 40? You may just need more practice even if you're doing a good job so far.
3. Join your local REIA.
4. You may have to pay a mentor because you're going to need someone outside of your local market. Most people around you won't want to be training their competition.
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Bill Fallesen
Norfolk, NE · Member since 2019 · 12 posts · 7 votes
7y
Fear of failure, I'm 63, retired due to arthritis, on SS, a little money tied up in IRA, read "Rich Dad Poor Dad 3 months ago and found Biggerpockets 1 1/2 months ago. I live in NE Nebraska in the largest town in the area and want to stay here. Most of the best deals that I've found are not close by but are down in Omaha. I want to house jack a multi with a VA loan to start and get experience being a landlord but there's nothing local. If I use my IRA then I face having to pay the taxes.
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Frank Patalano
OP
Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
7y
Originally posted by @Jesus Valverde:

Well I cant really consider my self an investor because I'm at the stage of the "hold back". I think it's a combination of lack of confidence as well as fear of failure. I talk to my wife about this all the time and I feel that although she supports me it also her fear that holds me back too.
I can't tell if you're ready or not based on the amount of information you've told me. I will tell you that you should be getting as much education as possible. Mass amounts of Education will reduce your fear. Does your wife want to become a partner in this? The best opportunities for growth are when husband and wife are on the same page. If you guys don't own a house yet why don't you start out with a house hack? Also start networking. You'll see it there are many others in the same shoes as you. Set some goals as well.
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Ty Kelly
Rental Property Investor · Jacksonville, FL · Member since 2018 · 3 posts · 0 votes
7y
@Frank Patalano thank you for posting this question. For me, I'm worried about funding the deal, whether that is hard money, financing, or cash I'm trying to save up. I have a wife and 2 kids, so I'm a little more hesitant, because I'm scared of making a big mistake that could potentially affect them. Honestly, for me, it's just doing that first deal. We just flipped a house and it went well. Bought for 120k, put 50k into it and sold for 235k. I definitely want to attempt the BRRRR method soon. Any suggestions are appreciated.
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Frank Patalano
OP
Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
7y
Originally posted by @Bill Fallesen:

Fear of failure, I'm 63, retired due to arthritis, on SS, a little money tied up in IRA, read "Rich Dad Poor Dad 3 months ago and found Biggerpockets 1 1/2 months ago. I live in NE Nebraska in the largest town in the area and want to stay here. Most of the best deals that I've found are not close by but are down in Omaha. I want to house jack a multi with a VA loan to start and get experience being a landlord but there's nothing local. If I use my IRA then I face having to pay the taxes.
So you don't got a lot of things going on here. All I can say is that if you plan on investing you can't always just wait for the perfect deal. I would love to have all my houses in one neighborhood. I would love to find a great deal on my own Street. But alas I end up investing where the best opportunities are. If that means I have to own and nine different towns, I do. You just seem to have a lot of expectations. I don't know. I have no idea how big your town is. My city probably has 600 multifamily. I own one. Instead I had to buy a few in the city next to me, and a couple more in the city next to that, and one or two in the city next to that. I think house hacking is a great idea. It's a good retirement play for you.
I'll throw you something really crazy. Can you house hack a new construction multi-family in your town? I'm not saying it's doable I'm just trying to be creative like Robert Kiyosaki always is.
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Jesus Valverde
Albuquerque, NM · Member since 2019 · 5 posts · 2 votes
7y
@Frank Patalano Thank you for the response. Education and Networking are my areas of improvement and the current task on my list. We do own a home now but house hacking would not be an ideal situation as we have 3 children here and would be really busy here in the house adding more to our household. Had i know about the house hacking before my purchase of my home now i would have purchased a tri-plex and rented out the other units, but oh well. All we can do is move forward. So to the drawing board, in the month of my my goals are different first I plan to attend the local REIA and connect with people who are where I want to be. Again Frank thank you for your time!
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Frank Patalano
OP
Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
7y
Originally posted by @Ty Kelly:

@Frank Patalano thank you for posting this question. For me, I'm worried about funding the deal, whether that is hard money, financing, or cash I'm trying to save up. I have a wife and 2 kids, so I'm a little more hesitant, because I'm scared of making a big mistake that could potentially affect them. Honestly, for me, it's just doing that first deal. We just flipped a house and it went well. Bought for 120k, put 50k into it and sold for 235k. I definitely want to attempt the BRRRR method soon. Any suggestions are appreciated.
If you did a good job on one then you might be able to repeat the process. I have 3 kids so I understand what you mean. I don;t worry about funding. If the numbers make sense then a lender will usually lend. The best lenders are the ones willing to say no if they are worried about the deal. You made more money on that deal then many people make in a year. You can do it.
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Henry Kaldenbaugh
Verde Valley Arizona USA · Member since 2018 · 115 posts · 98 votes
7y
Here in Central Arizona the market is mature and a lot of California money is chasing the properties. I am looking for buy and hold rentals that will CAP 10-12%. There are not a lot of them at that price. We keep looking and networking the real estate community.
Having said that, we recently (1 1/2 months ago) closed on a 10 CAP deal that we now have rented up and almost completely rehabbed.
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Blake Walsh
Huntington, NY · Member since 2018 · 12 posts · 6 votes
7y
@Frank Patalano
Lack of capital
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Johnny Galvan
Chicago, IL · Member since 2017 · 10 posts · 5 votes
7y
@Jacob Gelinas agree anyone buying retail is overpaying. The best deals are the distressed properties
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Eileen Mazza
Lender · Raleigh, NC · Member since 2019 · 27 posts · 14 votes
7y
Lack of inventory and so much competition for every property that hits the market here in the RTP (Research Triangle-Raleigh/Durham, NC). I don't want to overpay and/or over improve so I guess it's a few things but I'm working to overcome them as I do my research.
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Zach LemasterBusiness Member
Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
7y
The most successful investors put their money where the numbers make the most sense, which is probably not your backyard. You just need to ensure you find the right local team to ensure the property is in a good location & well managed! I urge you to take a step outside of your comfort zone to invest in areas where the cash flow makes more sense, and where investors are not overpaying for properties. Besides, isn't the long term goal to have these investments be passive anyways? So ultimately it doesn't matter if they are next door or in a different state.Think about the long term strategy, and how to scale!

For the investor that hasn't taken any action yet, better to just get something started somewhere! There is no substitute for first hand knowledge & taking action! Just my two cents on the matter.
-Zach
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Frank Patalano
OP
Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
7y
Originally posted by @Henry Kaldenbaugh:

Here in Central Arizona the market is mature and a lot of California money is chasing the properties. I am looking for buy and hold rentals that will CAP 10-12%. There are not a lot of them at that price. We keep looking and networking the real estate community.
Having said that, we recently (1 1/2 months ago) closed on a 10 CAP deal that we now have rented up and almost completely rehabbed.
10 CAPs sound dreamy in most parts of the country. Sounds like you are doing fine.
Opportunities will pop up just keep looking and Networking. In Boston most people are buying at a 4 CAP.
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Frank Patalano
OP
Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
7y
Originally posted by @Blake Walsh:

@Frank Patalano
Lack of capital
Hopefully if you don't have the capital, you have time to help people.
Successful investors are strong in time, capital, or experience.
Perhaps you can find a money partner if you are willing to put in the work.
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Frank Patalano
OP
Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
7y
Originally posted by @Eileen Mazza:

Lack of inventory and so much competition for every property that hits the market here in the RTP (Research Triangle-Raleigh/Durham, NC). I don't want to overpay and/or over improve so I guess it's a few things but I'm working to overcome them as I do my research.
Good things to consider. The best deals that you find will be off market deals. Inventory is important but you are going to find the best deals on properties not on MLS. Keep networking and keep looking. When someone wants to sell it will be quickly.
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Frank Patalano
OP
Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
7y
Originally posted by @Zach Lemaster:

The most successful investors put their money where the numbers make the most sense, which is probably not your backyard. You just need to ensure you find the right local team to ensure the property is in a good location & well managed! I urge you to take a step outside of your comfort zone to invest in areas where the cash flow makes more sense, and where investors are not overpaying for properties. Besides, isn't the long term goal to have these investments be passive anyways? So ultimately it doesn't matter if they are next door or in a different state.Think about the long term strategy, and how to scale!

For the investor that hasn't taken any action yet, better to just get something started somewhere! There is no substitute for first hand knowledge & taking action! Just my two cents on the matter.
-Zach
I agree. But I also think that many markets are overheated right now.
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Laura Weston
Accountant · Atlanta, GA · Member since 2019 · 8 posts · 3 votes
7y
@Frank Patalano deciding whether to fix and flip or start with rental. The endless choices make selecting and starting a real challenge.
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Priyanshu R.
San Diego, CA · Member since 2019 · 9 posts · 2 votes
7y
@Frank Patalano
I'm looking to invest out of state and unsure which market to start with, whether I want to go turnkey or build my team. How will I build my team (easier after reading David Greene book, but still). And properties on MLS don't look so attractive unless I do BRRRR - which I will, but thought I'd start with something simpler, get my feet wet, then figure out how this rehab thing works and that too OOS.
But I have been looking. I will do something and learn along the way.
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Devonte Smith
Chico, CA · Member since 2014 · 3 posts · 0 votes
7y
I have a house that I'm trying to get a good deal on it belongs to my wife's uncle. But I want to keep it for a rental but not sure how to use other peoples money on a rental.
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Ignacio Gonzalez
Member since 2018 · 2 posts · 1 vote
7y
@Frank Patalano I live in CA. I cant seem to find a way to start with $45k. Im starting to consider going out of state and try my luck somewhere else. Is $45k even enough to start investing. Can someone please point me in the right direction.
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Ari Bollers
New to Real Estate · New York, NY · Member since 2019 · 7 posts · 0 votes
7y
@Frank Patalano Lack of action plans and daily support system
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Jeremiah Mckenna
Member since 2010 · 8 posts · 0 votes
7y
Originally posted by @NICK SHELL:

@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
Look at incorporating in Wyoming, since the laws in Nevada have changed so much that it is not as protective as it used to be, plus now they charge business income taxes. i don't believe you need to get an S-Corp, just a different LLC for each asset. But talk to someone in Wyoming and they'll give you the legal advice in a more professional sense.
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Jeremiah Mckenna
Member since 2010 · 8 posts · 0 votes
7y
Originally posted by @Ignacio Gonzalez:

@Frank Patalano I live in CA. I cant seem to find a way to start with $45k. Im starting to consider going out of state and try my luck somewhere else. Is $45k even enough to start investing. Can someone please point me in the right direction.
$45k is a good start, but it depends on what you are trying to do. We used out seed money to get set up with some education, set up our office, our computer software (deal analyzer, rehab evaluator) signs, cards, joining local REIA, etc.
But again it depends on what your plan of attack is. You can learn how to be a wholesaler, and get a few deals going, then become a rehab/flipper, then work your way/money up to passive income with rentals, and then get into commercial.
$45k would be great for a flip if you find a house that you can purchase for $180k, rehab for $50-60k and then sell in the area of $340k. You would use the $45k to pay for the 10%-20% down (depending on the lender you find) and your carry costs, inspections and permits, as well as the interest only monthly payments. Then rehab the house and hopefully sell it within a three month period. You'd gross $110k, and net around $60k, depending on your cost of money borrowed.
We actually just had something like this happen, and actually found a private money lender that is willing to work with us.
You have to do your homework and make sure the market you are working in will have an After Rehab Value (ARV) that will work, as well as know how much to put into the house to make is sell, but not too much so that you don't make the profit margin, like overbuild for that area.
Get with a Realtor or two that know their area, and know what an investor needs and is looking for. There are a ton of Realtors out there that simply open doors and list houses, but not all of them know how this side of the game works.
Make sure that you have a set contract with the contractor/GC so that he is paid when certain preset benchmarks are met. Also, make sure that you pick a contractor that is licensed, insured and an adult about running his business, meaning he shows up on time, works professionally and keeps the site clean, as well as communicates well with you.
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Jeremiah Mckenna
Member since 2010 · 8 posts · 0 votes
7y
Originally posted by @Devonte Smith:

I have a house that I'm trying to get a good deal on it belongs to my wife's uncle. But I want to keep it for a rental but not sure how to use other peoples money on a rental.
Search on here for "creative financing" as there are a few good articles, as well as other blogs explaining it.
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