This is the one thing that every new RE investor has to confront and I’m no different. You see I’ve always had a way with numbers and a good head for business (at least I think I do), and I figured RE investing would be right up my alley.
Through a combination of BP’s calc and my own spreadsheet, I was analyzing dozens and dozens of deal and was finding some great results, at least on paper right? So what was stopping me from pulling the trigger? Fear? Insecurity?
You see on BP you hear great stories about how some people got it right but I’ve also read stories about how some gotten it very very wrong. I couldn’t get that voice out of any head saying “how can a 29 yr old RE investing newbie find these great deals , there must be something wrong with your calculations, theres a X factor that your overlooking. Your gonna go broke”
So what happened? I listened and kept analyzing but not actively participating.
I only realized my mistake when 2 properties I was analyzing, on different sides of the country got bought but what I can only assume is an investor that will do the very thing I analyzed.
What was the difference between them and I. They acted. They analyzed the property just as I did but they put the spreadsheet down and actually went and got the property.
STOP ANALYZING THE DEAL … SEAL THE DEAL !!!
Below I’m putting the number of the properties I lost in hopes that seeing my losses will stop you from having your own.
TRUST YOUR NUMBERS THEN TRUST YOURSELF.
Property 1: House Flip
Purchase Price: $200K
Rehab Cost: 40K
Carrying Cost: 1K/mo
ARV: 500K - 600K (based on comp homes)
Property 2: House BRRRR
Purchase Price: $30K
Rehab Cost: 10K
Carrying Cost: $200/mo
ARV: 60K - 70K
Average Rent: $850/mo (positive cash flow $250/mo)
The only way I have been able to be successful in anything is to screw up a bunch of times. (Boy the stories I could tell!).
What I have been very good at is diving in, head first. All in. My strategy has been to think "What is the absolute worst thing that could happen?" and then "If that were to happen, could I deal with it?" If I say yes to the second question the game is on.
The other thing that I ask myself when I have a negative thought is "Who would I be if I didn't have that thought?" That will shift all kinds of paradigms for you...at least it does for me.
(Note: I spent years as a speaker, life coach, trainer...the exasperating side benefit to that is constant self diagnosis...and some vodka for self medication).