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.
Rental Property Investor · Davenport, IA · Member since 2019 · 18 posts · 6 votes
7y
I'm still educating myself while building capital/paying off other debt. I will always keep educating myself, but should I finish paying off debts and building capital before I start investing?
My full time job. It pays well so it's hard for me to take a step backwards financially for the time being. I know that my time will be better spent towards my end goals, but I also have a family I need to take into consideration. When I can fully cover my monthly expenses with cash flow from our properties I'll feel more comfortable to make the switch.
Until your cashflow covers your monthly expenses. 🤣🤣🤣🤣
That is so funny. It took me 10 years of working 7 days a week to get there. You may be able to get there quicker but it takes a hell of a lot of work.
I have a family as well.
I live in your market and am networking every week. Looking at opportunities every week too.
@Frank Patalano Because it takes a certain amount of money for them to go into areas they don't understand. In this case, they will be worried. On top of that, they worry about whether you're reliable.
My full time job. It pays well so it's hard for me to take a step backwards financially for the time being. I know that my time will be better spent towards my end goals, but I also have a family I need to take into consideration. When I can fully cover my monthly expenses with cash flow from our properties I'll feel more comfortable to make the switch.
Molly,
If you make $200,000 a year, buying a single family home or a 2-4 unit apartment building is actually NOT worth your time. I have one of my staff members (engineer by training) actually calculate the number of hours an active investor needs to spend to find, analyze, negotiate, finance and manage a small deal (SFH to 2-4 family) and if you make $200K/yr or $100/hour, the paltry $200/month cashflow you make on an SFH does not make it worth while if you pay yourself for the time you spent doing all that work.
I've acquired over 1,000 apartment units and and some of my investors are high earning commercial real estate brokers, lawyers, doctors, business owners and other high income earners. A lot of them are probably smarter than me but they would rather invest passively than do it actively because it's not worth their time.
I'm still educating myself while building capital/paying off other debt. I will always keep educating myself, but should I finish paying off debts and building capital before I start investing?
I would pay off any High interest debt. My partner Jimmy owed about $70,000 in student loans when he bought his first house hack. It allowed him to earn income faster.
Real Estate Agent · South Dartmouth, MA · Member since 2016 · 13 posts · 10 votes
7y
@Frank Patalano every second of the day that I'm not at my full time job or with family I'm devoting it to real estate. I do it not only for the long term benefits but because it fascinates me. I'll get there someday :)
what's holding me back is not knowing where to start and not wanting to make a costly mistake because I haven't done enough research. The feeling of not knowing enough.
@Frank Patalano every second of the day that I'm not at my full time job or with family I'm devoting it to real estate. I do it not only for the long term benefits but because it fascinates me. I'll get there someday :)
That's awesome. It was hard to tell by your first post. Perhaps we can meetup at a networking event sometime.
what's holding me back is not knowing where to start and not wanting to make a costly mistake because I haven't done enough research. The feeling of not knowing enough.
Troy, Education is super important but you are never going to learn everything. I still learn new things everyday and I've been doing real estate for over 10 years. I still make mistakes. Even in real estate from time to time.
Realtor · Fort Lauderdale, FL · Member since 2012 · 17 posts · 1 vote
7y
@Frank Patalano I have 65k saved up for investing but I'm not sure what investment strategy I start with. Constantly thinking the pros and cons of each and it has me stuck. I know I want more capital so I can start to BRRRR. Should I wholesale? Should I flip? It's driving me crazy!
Could you explain the wholesaling process to me ? And that’s what I get stuck on as well , I don’t have anyone that could help me raise the money .
Raise the money?
Wholesaling.
Find a property. Off market. Make sure that you put it under contract for a deal. Make it win-win. You are helping others get out of a problem in their life.
Put the property under contract. You and the seller sign a purchase and sales agreement. You could give the seller money (bad idea) or write a check to your attorney or their attorney.
You contact your buyer's list with a potential opportunity.
You sell the contract (You are not selling a house. You are selling a contract to buy a house.) to the buyer who is using Cash or Hard Money.
The closing happens and you get paid either at closing or outside of closing.
@Frank Patalano I have 65k saved up for investing but I'm not sure what investment strategy I start with. Constantly thinking the pros and cons of each and it has me stuck. I know I want more capital so I can start to BRRRR. Should I wholesale? Should I flip? It's driving me crazy!
There are many ways to make money in real estate. Some of my friends are doing a few strategies at once.
Wholesaling costs the least amount of money to get started.
Flipping is a great way. You buy, fix, and then sell.
If you don't own a property now, I might consider a house hack to start.
Rental Property Investor · Minneapolis, MN · Member since 2019 · 18 posts · 3 votes
7y
Okay , so pretty much I am looking for a property that is for sell by owner ? And how would I get the money to buy the contract? And if I can’t afford an attorney at the moment , what is my other option to get the deal closed from the seller ?
My full time job. It pays well so it's hard for me to take a step backwards financially for the time being. I know that my time will be better spent towards my end goals, but I also have a family I need to take into consideration. When I can fully cover my monthly expenses with cash flow from our properties I'll feel more comfortable to make the switch.
Molly,
If you make $200,000 a year, buying a single family home or a 2-4 unit apartment building is actually NOT worth your time. I have one of my staff members (engineer by training) actually calculate the number of hours an active investor needs to spend to find, analyze, negotiate, finance and manage a small deal (SFH to 2-4 family) and if you make $200K/yr or $100/hour, the paltry $200/month cashflow you make on an SFH does not make it worth while if you pay yourself for the time you spent doing all that work.
I've acquired over 1,000 apartment units and and some of my investors are high earning commercial real estate brokers, lawyers, doctors, business owners and other high income earners. A lot of them are probably smarter than me but they would rather invest passively than do it actively because it's not worth their time.
Hi Michael,
Can you please elaborate more on "invest passively"? What strategies/ways to invest passively?
Okay , so pretty much I am looking for a property that is for sell by owner ? And how would I get the money to buy the contract? And if I can’t afford an attorney at the moment , what is my other option to get the deal closed from the seller ?
Yeah. You lost me a little bit. It could be a for sale by owner deal but not necessarily. The owner might have never started to market it at all and just decided that they wanted to be down with the property/problem.
You are putting down like $500.
You aren't buying the contract you are going to sell the contract.
Who said anything about getting an attorney? I mean I'm not saying don't have an attorney. You are selling the contract to someone else.
The buyer will pay the attorney.
Perhaps you need to start out a little smaller and referral fees from the wholesalers for small money so that you have enough to lock up a wholesale yourself.
My full time job. It pays well so it's hard for me to take a step backwards financially for the time being. I know that my time will be better spent towards my end goals, but I also have a family I need to take into consideration. When I can fully cover my monthly expenses with cash flow from our properties I'll feel more comfortable to make the switch.
Molly,
If you make $200,000 a year, buying a single family home or a 2-4 unit apartment building is actually NOT worth your time. I have one of my staff members (engineer by training) actually calculate the number of hours an active investor needs to spend to find, analyze, negotiate, finance and manage a small deal (SFH to 2-4 family) and if you make $200K/yr or $100/hour, the paltry $200/month cashflow you make on an SFH does not make it worth while if you pay yourself for the time you spent doing all that work.
I've acquired over 1,000 apartment units and and some of my investors are high earning commercial real estate brokers, lawyers, doctors, business owners and other high income earners. A lot of them are probably smarter than me but they would rather invest passively than do it actively because it's not worth their time.
Hi Michael,
Can you please elaborate more on "invest passively"? What strategies/ways to invest passively?
Thanks.
Uhh, I can.
Active investing is when you are doing alot of the work in the deal.
It could be wholesaling. Flipping. Long term buy and hold. You don't need to lift the hammer but most of the deal is done by you.
Passive investing is when you are putting your money into someone else's deal as a limited partner in a syndication, or investing in a crowdfunded deal, etc. You are not doing any of the work, you didn't find the deal, none of the due diligence, etc.
You are just investing in the deal for a return on your money. You get a return through distributions and when you sell.
Okay , yeah I got pretty confused at first . It makes more sense now . How can I find these people ?
Figure out a group of people that you want to Target. Perhaps people over the age of 70 with no mortgage, or out-of-state owners. You can buy a list and then mail to that list.
Kansas City · Member since 2019 · 1 post · 0 votes
7y
For myself, it’s time. I work to jobs and my time is very limited. Next week I have time off from one job and I’m going to take advantage of the time to “Drive for Dollars” and aggressively work towards my first deal.
I have my fears and concerns but I have to jump into the water. My time depends on it...
I guess for me is making a mistake and losing money rather than making a profit .
Mistakes are going to happen. I still make some mistakes in real estate. I lose money about once every ten deals. If you don't make a mistake once in a while then you are not pushing your goals hard enough. You are not growing.