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 brought my first house last August. It’s a 3 family house and I stay and one on the units and rent out the other two. I was able to save enough money for a down payment for a rental home but cant find a mortgage company. I’ve been told several times that I would need to have my house rented out for two years to have my rental income help me to qualify for my next loan.
Have you spoken to a mortgage broker? Not someone at a bank but a broker who searches multiple banks for you.
I have not, I've tried contacting the banks and lenders directly. I will differently try a broker!
You want to talk to a broker because they know the deals of 10+ lenders at once.
Columbus, OH · Member since 2017 · 35 posts · 7 votes
7y
@Frank Patalano Honestly, lack of people willing to mentor or assist with hands on training. I've read a million books, but noone to lend a hand with the process.
@Frank Patalano Honestly, lack of people willing to mentor or assist with hands on training. I've read a million books, but noone to lend a hand with the process.
What if you turn that concept upside down? Find people in your local reia that are busy. Go to them and ask how you can help them (for free). Keep going the meeting. Eventually someone will take you up on that offer. Provide value, provide help.
Either that or you're going to have to pay for a mentoring program.
Specialist · Newport Beach, CA · Member since 2016 · 25 posts · 18 votes
7y
Right now, I don't feel educated enough. How to underwrite effectively, estimate rehab, how to back up assumptions. A lot of that is answered with my needing to read a lot and practicing underwriting. I really think that using the BP calculator would be best, but I need to commit to the payment - which would only happen if I understood the following steps.
Next (And I think this is key for me) is figuring out how to source the capital, since I wouldn't be unable to do it myself. The bank account ain't what it used to be. If I knew this process, I think it would be only a matter of time.
Next is to have the wife onboard...to be honest, this may be harder than I'm thinking.
Right now, I don't feel educated enough. How to underwrite effectively, estimate rehab, how to back up assumptions. A lot of that is answered with my needing to read a lot and practicing underwriting. I really think that using the BP calculator would be best, but I need to commit to the payment - which would only happen if I understood the following steps.
Next (And I think this is key for me) is figuring out how to source the capital, since I wouldn't be unable to do it myself. The bank account ain't what it used to be. If I knew this process, I think it would be only a matter of time.
Next is to have the wife onboard...to be honest, this may be harder than I'm thinking.
In SUMMARY:
1) Having the underwriting down pat
2) Knowing where that money comes from
3 SO agreement
Let's go over your summary.
1. Underwriting. There is nothing wrong with being educated but at some point you need to have enough knowledge to be able to make offers. Give your 3 months to practice a system. You will never know everything that you need to know.
2. Capital. I'm not sure where you are going with this. If you don't have enough money then maybe you need a partner with money but no time.
3. Agreement. Hey listen. My wife still rolls her eyes about real estate. She calls real estate my mistress. At one point I took some of our investing money and bought a multi. You can't be in all stocks. There is nothing wrong with diversifying and that is what I did. Yes supportive family members are a plus but not a requirement. My mom doesn't even know that I own any real estate. Lol. Seriously.
Money! But we have a goal date set that we are working towards
So you are getting the money in February. Great. What type of deal do you want to start out with? I hope that you are out networking and looking at property. Looking is free and it will help provide knowledge as well.
Money! But we have a goal date set that we are working towards
We are looking at turning 50K into a BRRRR investment so that after project 1, getting our feet wet, and going through the process we can get the $$ back out and learn from our mistakes and jump right back in, with the hopes that we can build our business using the original 50K over and over. Ambitious, but a goal.
Money! But we have a goal date set that we are working towards
We are looking at turning 50K into a BRRRR investment so that after project 1, getting our feet wet, and going through the process we can get the $$ back out and learn from our mistakes and jump right back in, with the hopes that we can build our business using the original 50K over and over. Ambitious, but a goal.
I think that it is awesome. Keep learning until you get that money. And keep networking.
Money! But we have a goal date set that we are working towards
We are looking at turning 50K into a BRRRR investment so that after project 1, getting our feet wet, and going through the process we can get the $$ back out and learn from our mistakes and jump right back in, with the hopes that we can build our business using the original 50K over and over. Ambitious, but a goal.
I think that it is awesome. Keep learning until you get that money. And keep networking.
Thanks! Trying to balance the education piece as I finish up my Masters Degree, busy busy!!!! But I find myself using real estate stuff as an excuse to not study haha
Right now, it's navigating through a "no" answer I received from a lender about the refi portion of the BRRRR strategy. The email stated, "Congratulations on getting approved for a hard money loan!...(regarding the refi however) Although your debt to income is too high to qualify for a conventional loan, you will be able to qualify for non-conventional." Now I'm back to the drawing board about what the heck that means and how/if it adversely affects my intention to buy and hold.
@Frank Patalano The two things that hold me back are budgeting my available time to make real estate investing a priority. Currently working 12-14 hour days, 5 days a week, and with such limited free time, I feel like a selfish dad not spending time with my wife and children. While also understanding that in making the switch to a full time real estate investor, I won’t have to make the choice between family and work. Issue number two, this has to do with “thinking” my real estate approach works versus “knowing” something works.
Right now, it's navigating through a "no" answer I received from a lender about the refi portion of the BRRRR strategy. The email stated, "Congratulations on getting approved for a hard money loan!...(regarding the refi however) Although your debt to income is too high to qualify for a conventional loan, you will be able to qualify for non-conventional." Now I'm back to the drawing board about what the heck that means and how/if it adversely affects my intention to buy and hold.
I hope that you will talk to a few other lenders. I've had one lender deny me and three others approve me on the same deal. They're still There's still approving you but just with more expensive money. That money might be more expensive than what you want to pay.
@Frank Patalano The two things that hold me back are budgeting my available time to make real estate investing a priority. Currently working 12-14 hour days, 5 days a week, and with such limited free time, I feel like a selfish dad not spending time with my wife and children. While also understanding that in making the switch to a full time real estate investor, I won’t have to make the choice between family and work. Issue number two, this has to do with “thinking” my real estate approach works versus “knowing” something works.
I understand completely. I have worked 2 jobs for the last 10 years plus real estate. If you want to be successful you have to sacrifice something short term.
The only way to know that an approach will work is to take action. Run the numbers as many times that you want but eventually you have to take a risk.
I’d say a few things are holding me back. I live in So Cal and prices are very high here. Looking outside of CA as an investment property, I’m told that we need 25% as a down payment and closing costs. More affordable places that we could house/hack or invest in are over an hour away without traffic from our jobs & we plan to stay with our jobs for a while. We don’t have partners or a team of contractors/property managers. We don’t have a huge amount saved so right now we are focusing on education and saving.
I’d say a few things are holding me back. I live in So Cal and prices are very high here. Looking outside of CA as an investment property, I’m told that we need 25% as a down payment and closing costs. More affordable places that we could house/hack or invest in are over an hour away without traffic from our jobs & we plan to stay with our jobs for a while. We don’t have partners or a team of contractors/property managers. We don’t have a huge amount saved so right now we are focusing on education and saving.
Set written goals to pick a market by a certain date, and network to build a team.
Real Estate Broker · Edina, MN · Member since 2015 · 56 posts · 37 votes
7y
@MarkBommarito
Look in MN, we might be able to help you! I have worked with 3 CA investors in the past. Also, have you considered commercial financing to lower your down payment? Or living in the property? Direct message me to set up phone call if you would like to chat more.
@Frank Patalano Honestly, good old fashioned fear. The epitome of newbie evil. I have $20k or so in savings ready to go, well above 700 credit score and a steady paycheck. I have studied the market here and know the area but fear of failure/losing money is all that’s really holding me back. It’s a brutal hindrance that shouldn’t be a hindrance at all. I have never had a mentor or someone to guide me with moving forward and maybe just a nudge is all I need.
It sounds like your mindset is holding you back more than your age.
You could be out there educating yourself. You can be out there networking. Perhaps mentoring at a real estate office. Start your own teen Real Estate or investment Club. Bring in speakers. Start your own podcast about what you're learning about.
You could be investing in REITs right now. My eight year olds are opening up their own stock accounts next month. I just need to sign off on them.
@Frank Patalano Honestly, good old fashioned fear. The epitome of newbie evil. I have $20k or so in savings ready to go, well above 700 credit score and a steady paycheck. I have studied the market here and know the area but fear of failure/losing money is all that’s really holding me back. It’s a brutal hindrance that shouldn’t be a hindrance at all. I have never had a mentor or someone to guide me with moving forward and maybe just a nudge is all I need.
I'll help give you some nudging. You have a steady paycheck. That alone gives you some comfort if you need to take a risk. Don't have a fear of failure. I'm not saying to throw money away. No matter how much you learn it will never be as much as you need to in your first deal. I lost $20,000 in my first deal. Thankfully I did not give up then.
You need to take a little risk in order to get better and grow.
You might be able to find a mentor but just to find an accountability partner at your local reia.
Rental Property Investor · San Diego, CA · Member since 2019 · 11 posts · 4 votes
7y
@Frank Patalano
Just started my career and have been doing a lot of reading. I live in San Diego and the market is pretty tough for a newbie so I've been increasing my knowledge base on long distance RE investing.
What's holding me back is the lack of cash to Kickstart BRRRR system.
I have VA loan available but current market doesn't give me the confidence to buy and house hack for a few years... More research needed on my part.