Providence, RI · Member since 2018 · 29 posts · 409 votes
7y
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 think my problem is the analysis paralysis as well. I use the calculators and run the #'s but not sure if they're right. I just don't want to make a bad decision. I need to network more also. I plan on attending some local meet ups in RI.
There are a lot of great investors that go to the Rhode Island Real Estate Investors Group. I'll see you there this month. What type of properties are you analyzing?
Funding! I just started my real estate agent career but have listened to most of the BP podcasts. I feel like I have all of the right tools to my disposal especially since my father is a general contractor. I’m going to challenge myself and see if I can put an offer this month if there is a good deal around my neighborhood. Prices are just so high here though.
Don't be ashamed to put in an offer based on what you think it's worth. It's different if you are lowballing to lowball. Run your numbers and stick to them.
Investor · Westerly, RI · Member since 2019 · 45 posts · 9 votes
7y
@Frank Patalano
I'm interested in small multi families at the moment to get my feet wet. Which event will u be at? Also where can I find more meet ups other than on meet up app?
Annapolis, MD · Member since 2019 · 31 posts · 3 votes
7y
@Frank Patalano
Literally everything is holding me back. I know next to nothing. I have, however, decided to become a real estate investor for cash flow. I think a good first start would be a duplex purchase. I have very little money to put down.
Where can I go/what can I do to better educate myself? Should I form a corporation for tax benefits? Would that change the kind of loan and interest? This would be a first time ever purchase. I rent my friends basement.
I'm interested in small multi families at the moment to get my feet wet. Which event will u be at? Also where can I find more meet ups other than on meet up app?
RIREIG meets on the 3rd Thursday of the Month at the Crown Plaza in Warwick. $10 a meeting.
I help run the group. We post on Facebook every month.
If you want bring a copy of some analysis that you have done on a 3 family. There are at least 2 people that own in Westerly that we could have them compare the numbers.
Literally everything is holding me back. I know next to nothing. I have, however, decided to become a real estate investor for cash flow. I think a good first start would be a duplex purchase. I have very little money to put down.
Where can I go/what can I do to better educate myself? Should I form a corporation for tax benefits? Would that change the kind of loan and interest? This would be a first time ever purchase. I rent my friends basement.
How is your credit?
If I were you I would be looking at a 3 or 4 unit.
How can you educate yourself??? You are on Bigger Pockets, a great source of Education. Besides that, read books on Real Estate, listen to podcasts, and do some networking.
Do Not form a corporation to buy real estate. Do a house hack instead.
Attorney · Los Angeles, CA · Member since 2019 · 12 posts · 13 votes
7y
@Mike Dymski It took me 10 long years to buy my first deal. The game changer was finding out that I could buy properties in TX that cash flowed. It was 2007 and credit was easy to get. I got a HELOC on my house and bought a vacant 4-plex in Fort Worth for $130k. Rather than counting on big gains, I focused on the downside. If I could rent 1 unit for $550 then it would pay the monthly HELOC interest and I would get a tax write off for depreciation. A lot of things went wrong and I don't recommend buying a vacant 4 plex in another state as a first investment. But focusing on whether I could afford to carry the building for 10 years with only 1 tenant got me in the game.
@Mike Dymski It took me 10 long years to buy my first deal. The game changer was finding out that I could buy properties in TX that cash flowed. It was 2007 and credit was easy to get. I got a HELOC on my house and bought a vacant 4-plex in Fort Worth for $130k. Rather than counting on big gains, I focused on the downside. If I could rent 1 unit for $550 then it would pay the monthly HELOC interest and I would get a tax write off for depreciation. A lot of things went wrong and I don't recommend buying a vacant 4 plex in another state as a first investment. But focusing on whether I could afford to carry the building for 10 years with only 1 tenant got me in the game.
It's amazing how much prices are different in different parts of the country. I remember a few years ago when I almost invested in Memphis single families. Each one was cash flowing which I thought was shocking.
Rolling Meadows, IL · Member since 2017 · 7 posts · 2 votes
7y
I'm looking to execute on my first wholesale deal, and what is holding me back the most is hesitation around legal and contract terms. Is there a best practice to follow when crafting your Purchase and Sale Agreement contracts?
I'm looking to execute on my first wholesale deal, and what is holding me back the most is hesitation around legal and contract terms. Is there a best practice to follow when crafting your Purchase and Sale Agreement contracts?
Every state is different. You should definitely be careful when writing your first contract. Some people pay an attorney for the first one. If you belong to a REIA someone might send you theirs. No guarantee that it's any good.
Philly PA · Member since 2015 · 37 posts · 39 votes
7y
Right now? Cash. I’m concentrating on paying off student loans so I will have more income to play with later and that doesn’t leave a lot for investing.
Rental Property Investor · Houston, TX · Member since 2017 · 529 posts · 467 votes
7y
@Vinay H. If you know what you are doing, you make money in both the up and down market. Only speculators (not investors) lose money in a crash. I am praying for another crash right now. You make more money in the down market as a rule.
Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
7y
Originally posted by @Account Closed:
Right now? Cash. I’m concentrating on paying off student loans so I will have more income to play with later and that doesn’t leave a lot for investing.
All I will say is that if you can get a better return on a property then you should buy it. Every investor that I know had debt when they bought their first property. My partner Jimmy had $70K in college loans when he bought his first house hack. The Cashflow from the house hack helped pay off his student loans.
@Vinay H. If you know what you are doing, you make money in both the up and down market. Only speculators (not investors) lose money in a crash. I am praying for another crash right now. You make more money in the down market as a rule.
To be successful in real estate you need to have a strength in money, knowledge, or time available. Figure out which one you are going to focus on.
Finally people get better at real estate by taking action. The good news is that you took action by responding to this post so it is a step in the right direction.
Thank you for responding! My credit is great, my job is a very good one, I’m single, no kids, and I’m debt free.
Also, I must be missing a feature for this app. I had to scroll in my phone for quite some time to get to your reply. Is that just a bad app feature?
It's something they need to fix with the app. At the same time it's rare to have a post with this many comments.
Sounds like you're in a great spot. Just learn as much as you can and network. Give yourself some goals on what you want to accomplish over the next 3 months and try to hit those targets in relation to education and networking. After that start looking at property. Besides that keep us in the loop.
Rental Property Investor · San Diego, CA · Member since 2017 · 10 posts · 2 votes
7y
My biggest mental barrier is finding the right market to invest. San Diego doesn't seem like an option. And I am fearful that whatever market I choose, I'd be late to the party. I have to find a system to find potential markets to target and go from there. But I'm stuck on how to find upcoming areas.
I am self employed (unrelated to real estate) and I have been growing steadily over the last 8+ years. Originally, I was employed at one place where I made enough to pay my bills while the profits from the business were reinvested so I could grow it. Several years ago, I hit a wall as i wasn't having enough time to grow anymore because of the time spent at my employed job, so I made the tough choice to go all-in on the business.
Things went well but my income was pretty low as I only made about 16-18k annually. I worked out some private deals and took out private loans to enable me to expand. These deals we're usually 2-3 year loans to buy profit-producing assets. It obviously increased my operating income but the extra profits went almost entirely toward the payments of the loans used to buy these assets. I have done this about 8 times since 2012 and often carried 2-3 private loans at a time.
Purchasing all of these assets benefited me on taxes because my tax burden has been pretty much zero due to having kids. However, child support agencies don't always seem to understand how businesses work and also don't seem to know how to follow their own laws because they can't make sense about what the language even means in the laws because, again, they don't understand businesses. As a result, my child support has been a little high.
Since my tax returns have been low, but child support calculated on a much higher income, that has resulted in making my DTI ratio a little high. To top it all off, I put a business vehicle in my name instead of my business name, which counts toward my DTI.
The end result is that I can't get a loan right now at least until the vehicle loan is gone but I will likely be plagued with child support issues for many more years to come due to, what I find to be, unfair child support calculations simply due to not understanding their own laws.
Edit: I am VERY confident in my financial ability when it comes to researching and working numbers. I am not afraid of debt. I'm not worried too much about depreciation. I'm also not worried about the common problems that I hear about with rental properties. My wife and I have a simple goal of having a long-term mostly passive income stream for retirement.
When I do finally manage to get a loan, I probably won't be worried about the mortgage. I will, however, be worried about potential repairs and updates to properties. When I bought my personal home 10 years ago, I paid it off in 6 years. It was a fixer upper (still is!) but it gave me a lot of experience. I think I have enough knowledge to know what I can and cannot do in a rental as well as enough knowledge to make sure I don't buy more than I can handle.
What I truly lack is knowledge in creative ways to get access to money. To me, business is nothing about emotions and all about numbers.