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.
Specialist · Arizona/California · Member since 2019 · 28 posts · 8 votes
7y
My immigration status, Through sheer hard work I’m fortunate enough to be in a financial position whereby I can likely afford a few projects.
However, I’m seeing this as a blessing, hopefully it’ll be resolved soon and it’s given me a runway to learn as much as I can so I don’t make huge glaring errors when I decide on my first deal :)
you got money? jk. I know I am just going through a small rough time but money will flow shortly.
I do, lol. But I wouldn't touch California.
Seriously though if you are out there networking people must see how good of a job your doing. If you are bringing deals to meetings, someone will want to partner with you.
My immigration status, Through sheer hard work I’m fortunate enough to be in a financial position whereby I can likely afford a few projects.
However, I’m seeing this as a blessing, hopefully it’ll be resolved soon and it’s given me a runway to learn as much as I can so I don’t make huge glaring errors when I decide on my first deal :)
Not sure if your fiancee is a citizen but they might be able to own the company that you are doing real estate through.
With your background I highly doubt that you will make an obvious error. You will make a few small ones. That is how you gain experience.
Rental Property Investor · Member since 2019 · 29 posts · 2 votes
7y
@Frank Patalano
I’m new to this but I’m starting to get more involved. I’ve always wanted to get into rentals but I am deathly afraid of giving it my all and failing. What has helped me is hearing someone say that staying at a 9-5 job and not trying because you’re afraid of failing is just another form of failing.
I’m new to this but I’m starting to get more involved. I’ve always wanted to get into rentals but I am deathly afraid of giving it my all and failing. What has helped me is hearing someone say that staying at a 9-5 job and not trying because you’re afraid of failing is just another form of failing.
Well you mine as well give up now.
I'm kidding.
You are going to fail once in a while. I failed on my first real estate investment. Lost $20,000 dollars. I worked 2 jobs plus real estate for over a decade. Everyone has their own path. Don't worry about the naysayers.
The main thing holding me back right now is knowing exactly what expense categories I will incur with purchasing. I have a good idea of what properties I want to invest in, but I am not quite sure what are the right questions I need to ask the selling companies/owners as to what is already in place before pulling the trigger.
I know the main categories will be: Insurance, Maintenance Reserves, Taxes, Property Management, and Vacancy.
Can anyone help me with the other pitfalls I can be missing?
Philadelphia · Member since 2019 · 8 posts · 2 votes
7y
@Frank Patalano
Cash. I want to BRRR. I can find good deals but don't have the money hml require to lend me the loan. Understandable but annoying at the same time. I can't FHA and finding private money is next to impossible for me.
Rental Property Investor · Waukegan, IL · Member since 2018 · 2 posts · 4 votes
7y
For me it has been getting my first loan. I have never brought a home and im renting my first place at the age of 32. Mainly because I travel for work and live out of my suitecase and hotels. I have learned a lot from this first rental that would make me look for when looking for my first property.
With my work situation,I work in experiental marketing as a indipendent contractor for years. I have worked with a company for a year or 2 on different projects and when they are done, I move onto the next project that may be with a new company. I seen that it is easier to get a loan with a stable job but with my job its not the easiest. I had one person trying to help me get a loan but they wanted info that I didnt have and it was hard for them to understand my job and how it works. I was trying to get pre approved since its easier to make an offer if you are.
Now I heard there are other ways of getting loans but I only know the traditional one. Anyone can elaberate on where else I can get help from or if someone can help me explain to ppl how I make money.
@Frank Patalano I don’t have a lot saved and there’s so much information out there I’m overwhelmed where to start. I just can’t seem to find the inexpensive 4 figure properties everyone finds that gets them started.
I feel like I’m not ready yet, but I’m starting to wonder if that’s just fear talking. A couple things come to mind:
1) I live in Washington, DC where housing costs are really high. I’ve been dreaming of moving to NYC for a year within the next year (but we’ll see) and then moving to San Diego for a bit. Although, I don’t have definite plans to do that. It’s tough to commit to buying a home here when my plans within the next year are up in the air.
2) I don’t totally know the best ways to find good deals, what construction/repair costs are reasonable, etc. I feel like I’d be easily taken advantage of if I’m not educated on it. So I’m learning and then I’ll start trying to build a network as well.
3) I’ve got about $160k in my 401k. I have about $17k in savings (that includes my emergency fund). I want more in order to be able to put 3.5% on a duplex in the DC area while still having some liquid savings.
I’m continuing to save, trying to learn more about investments, and holding off to see where I end up. There’s also discouragement from some family members - “rental properties aren’t worth it, they’re too much work, you barely break even.” I try to just ignore that.
Flipper/Rehabber · Toronto, ON · Member since 2018 · 17 posts · 8 votes
7y
I live in Canada; looking for investment in US. I have willing partners in US. I overcame the fear factor. I do analyze properties often and have found a few work-able ones. Thanks to bigger pockets, I think I have just enough knowledge to dip my toes in the REI world.
What is holding me back is the uncertainties over cross-border financing. I'm not sure where to start on that. Should I start an LLC in US with my partners? But then, I read that it may not be easy to get financing for LLC (for SFH or small MFH). Or, should I just do partnerships? With partnership, can we get approved for mortgage based on the US credit of one of the partners? These are the questions for which I am still trying to get some clarity on.
The main thing holding me back right now is knowing exactly what expense categories I will incur with purchasing. I have a good idea of what properties I want to invest in, but I am not quite sure what are the right questions I need to ask the selling companies/owners as to what is already in place before pulling the trigger.
I know the main categories will be: Insurance, Maintenance Reserves, Taxes, Property Management, and Vacancy.
Can anyone help me with the other pitfalls I can be missing?
Depending on the type of property you might be paying for heat, electric, sewer, trash, Etc. Each market is a little different. I have a property in a small town where you pay a fire district tax. You should be able to get profit-and-loss documents on a few properties in the market you're looking at. Most real estate agents should be able to get them for you for a few multi families.
Professional Engineer · Minneapolis, MN · Member since 2017 · 117 posts · 75 votes
7y
@Frank Patalano When I was looking for my first property, what was holding me back was lack of confidence in my numbers and abilities. This still holds me back today. I hustled to find deals, I would have accepted offers for 70-80% of market value. But I would back out of the deal thinking "how could a new guy be getting accepted offers on these deals, what did I miss?" This happened at least 3 times. I finally pulled the trigger early in 2018 and just bought one. It's been an experience. Had some trouble with the city with the rental license, even though it had had a license for years. My first tenant got a nasty divorce and left just 6 months into the lease (everything looked good on paper). Had to find a replacement tenant right at the beginning of winter. Ended up finding a great tenant but slightly below market rent. Still cashflows but doesn't leave a super healthy margin after expenses, vacancy and capex accounts are filled. At the end of the day, the process of doing your numbers properly, taught on biggerpockets is what saved me. I underwrote for vacancy, repairs, capex etc. So, yes I have below market rent, which stinks for now. But the property still cashflows, not much cashflow but it sure beats being underwater each month.
Cash. I want to BRRR. I can find good deals but don't have the money hml require to lend me the loan. Understandable but annoying at the same time. I can't FHA and finding private money is next to impossible for me.
Your best shot is to find a partner who has money but no time. They will invest in your deal and split the profits with you. We have some hard money lenders in our Market that will lend up to 100% of the purchase price. Keep networking to find one. If not perhaps you'll have to wholesale your first deal or two to generate some money.
For me it has been getting my first loan. I have never brought a home and im renting my first place at the age of 32. Mainly because I travel for work and live out of my suitecase and hotels. I have learned a lot from this first rental that would make me look for when looking for my first property.
With my work situation,I work in experiental marketing as a indipendent contractor for years. I have worked with a company for a year or 2 on different projects and when they are done, I move onto the next project that may be with a new company. I seen that it is easier to get a loan with a stable job but with my job its not the easiest. I had one person trying to help me get a loan but they wanted info that I didnt have and it was hard for them to understand my job and how it works. I was trying to get pre approved since its easier to make an offer if you are.
Now I heard there are other ways of getting loans but I only know the traditional one. Anyone can elaberate on where else I can get help from or if someone can help me explain to ppl how I make money.
Other ways to get money. Hard money, private money, seller financing.
Hard money is at a higher interest rate but the lender looks at the deal.
Private money usually involves a friend or family member at a low to moderate interest rate.
Seller financing is having the seller hold the mortgage.
You could also find a partner and split your first deal.
@Frank Patalano I don’t have a lot saved and there’s so much information out there I’m overwhelmed where to start. I just can’t seem to find the inexpensive 4 figure properties everyone finds that gets them started.
So set goals to save more and learn more.
After one month more studying pick one investment strategy and focus on it.
"4 figure properties?" What are those? I lost $20,000 on my first investment. But that's how I learned.
I feel like I’m not ready yet, but I’m starting to wonder if that’s just fear talking. A couple things come to mind:
1) I live in Washington, DC where housing costs are really high. I’ve been dreaming of moving to NYC for a year within the next year (but we’ll see) and then moving to San Diego for a bit. Although, I don’t have definite plans to do that. It’s tough to commit to buying a home here when my plans within the next year are up in the air.
2) I don’t totally know the best ways to find good deals, what construction/repair costs are reasonable, etc. I feel like I’d be easily taken advantage of if I’m not educated on it. So I’m learning and then I’ll start trying to build a network as well.
3) I’ve got about $160k in my 401k. I have about $17k in savings (that includes my emergency fund). I want more in order to be able to put 3.5% on a duplex in the DC area while still having some liquid savings.
I’m continuing to save, trying to learn more about investments, and holding off to see where I end up. There’s also discouragement from some family members - “rental properties aren’t worth it, they’re too much work, you barely break even.” I try to just ignore that.
Every city that you mentioned is a place that I personally would not be investing in right now. It is very hard to make a profit on most properties in those markets. Real estate markets run in cycles. Be careful buying at the top. At the same point keep educating and networking. No matter what I would be househacking a multi and picking a decent neighborhood but a property that must cashflow (make money).