Investor · Member since 2019 · 59 posts · 73 votes
Because it’s hard and taking the first step in the hardest! We have money ready to go and I always wonder why people who seem to do better than us, don’t invest in RE. But the emotional roller coaster has almost done me in! I know I’m not supposed to let feelings come into play, and it’s just numbers, but I’m especially sensitive to it today. We have put in two offers that have been rejected. And we had one accepted today, but decided to pass. Tell me how you overcame the first JUMP, and let me know that it gets easier ;)!
I’m working on my fifth property right now but still continue to have problems with my others. My third one, a duplex, finally has a tenant paying rent after the previous one was behind for months. I’m finally going in the black with this property after a year. Is it too much to ask for several months of stable income? However, it’s never the case. It’s alway a roller coaster every month wondering if one of my tenants will not pay rent this time around. And those repairs always pile up. I keep telling myself I’m in it for the long haul and that we are fortunate to be in this position as most others are not.
I hope you find your property and good luck on your real estate future!
I made my bought investment last year. We also got declined couple of times, and I was loosing hope. We made an offer again, and we became the backup offer. The investor who was going to buy it backed out due to the amount of work. Work doesn’t scare us, the money did, so we came in with a much lower offer for an as-is. We scrambled for money and got our property in November. We blew up our budget, and we found ourselves using credit cards to finish the project, and I reminded myself everyday that if it was easy, everyone would do it. Made an agreement with my contractor bc we ran out of money to pay him. The properties rented in March and April 2019, and this month the earnings are making the final payment to my contractor, and have been paying extra for my monthly line of credit payment. Don’t give up, analyze your deals and go for it. Keep us posted!
It's very hard! Finding the right deal, negotiating, securing financing, all of the back and forth with underwriters, property managers, inherited tenants, tenant issues, late payments, hunting tenants for rent, excises, repairs, evictions, lawsuits, etc.
Real estate has been around since the beginning of time, if it were easy, more people would be doing it. Those of us who stick with it will likely be doing better than before we started.
Do you remember when you learned to drive. There was excitement and fear and for me I wanted to drive all the time. Then I got my license and my parents said I could drive to the store on my own. I think I sat in our driveway for 30 minutes before I started the car. I was full of fear. I knew how to drive. I knew what to do. But I just couldn’t do it. After 30 minutes I finally started the car and drove to the store. How you feel now is how I was on those 30 minutes. Eventually you have to do it or you have to understand you won’t go anywhere.
We all get nervous. I’ve done countless deals. And every time my stomach turns. It happens to us all. Yes you will make some mistakes but you will learn a ton. Run your numbers and double and triple check them. But after you do that and if they hit where you want them and you know it’s a deal, you need to pull the trigger. Because you miss 100% of the shots you don’t take.
Keep your head up Tim it will get easier I promise . I went and continue to go through the same crap you mentioned but stick it out and you’ll find the property gets nicer and you will get better which in turn means the tenants get better and systems improve . Keep in mind The more units you get the more you can absorb these problems .All start up businesses are difficult and wobbly the first couple years so we should expect hardship and RE is no different . It is the reason most small business’s fail in the few years :because it’s way harder than people thought ! Keep your head down and move forward no matter what .. even if it feels like it’s just one inch at a time .. always move forward and think on the end goal ,not today’s problems ! You’ll look back and say geez that wasn’t as big of a deal as I thought it was back then
I'm still in the early days myself, but what got me over the hurdle on my first property was making a pros and cons list and suddenly realizing "I'd rather have all those problems (on the cons list) than stay stuck doing nothing and feeling the way I am now."
And sure enough, we did run into some challenges. The repair went over-budget, and I ended up spending all my weekends and evenings elbow-deep in a bucket of thinset, wrangling a rented paint sprayer, etc. But a few times I remembered back to that moment and thought, "yes, I'm happy to have this problem instead of the stagnation and frustration that I had before." It was satisfying to be working my way through those challenges.
Obviously, it's good to be as careful as you can to avoid problems, but no matter how hard you plan, stuff will come up, it seems. I just listened to a podcast where the investor referred to the first 5 years as the years when he had to learn everything by going through it and said that everything got much easier after that.
Anyway, I really relate to where you're coming from. Good luck!
@Todd Powell. Cold feet I guess. I calculated the property with Airbnb in mind. And everything seemed great. Then I started researching more and thought I would need a full second bath and started adding that to my calculation. Then I thought, what if Airbnb isn’t sustainable (I mean it is now where I live, weddings, university, vineyards), but things could change. I wouldn’t even be close to the 1% if I had to keep it as just a rental and it scared me. Not sure if I am looking for a unicorn. A property that can be 1% as a rental and of course more as an Airbnb.
So basically fear took over. And I couldn’t decide if it was rational.
I appreciate so many comments on this thread. It is encouraging me to pick up my big girl pants and keep moving forward. No point in living with regret (even though I know I could’ve tricked out that awesome bar in the basement ;)!
Thank you for your transparency. I am starting out on this journey too and am going through the same emotions as you! It’s tough but we have to make the first leap! Nothing beats a failure but a try. Keep us posted!
It's not easy at all especially when you see that the cashflow/profit isn't worth a few hundred because of the headaches. Sometimes when setbacks occur profits are non existent for years. It gets easier when the mortgage is paid and the property appreciates.
Tenents also make the difference. It's a business and the tenants are like your employees. Crappy tenants are a costly liability
@Anita Anand I feel your pain. I have submitted multiple offers and have been rejected, but I finally have a property under contract. Even that is not a sure thing because of due diligence. I just remember my “why” for doing this. Having something to teach and pass on to my kids is the reason I do this. Financial freedom and life balance also keep me plugged in. Stay the course because I’m sure the great things are on the other side of this for you!
@Anita Anand Hi Anita! I , like you always shoot to worst case scenario... I've since gotten a little bit better and now when I analyze deals I just crunch numbers in an ultra conservative way. As far as your Air BnB BRRRR, worst case if Air BnB were to ever be illegal in your area, does the properties numbers still work as a long term rental? Just something to think about!
The feelings you've got going on, and the fear itself, are all part of the growth process.
I would suggest just going for it. The numbers don't have to be perfect, and I have recently learned something called GETMO: GOOD ENOUGH TO MOVE ON
Sometimes we have to stop analyzing and say GETMO.
Other suggestions to consider: share your deal numbers for help in analysis, get a mentor, get a partner, or invest in a different market? But don't stop taking action. More time in the forums is not the answer.
My wife reminded me yesterday that exactly 3 years ago we bought our first flip. It was a disaster, but I learned so much from that and from each of our deals since then, I have no regrets about jumping into this. In about 3.5 years we have done about 25 deals total. Some winners, some losers, but no regrets because it's been a great education. Just like others have stated, with experience comes a certain grit, and eventually you realize it's not a total roller coaster after all!
Most good deals take about 20-30 offers before connecting on the juicy ones. You have to want to succeed at this more than anything else and those secondary fears will be put aside.
@Kyle Brodwater exactly, if the Airbnb’s were to become illegal, I would just be barely break even on a regular rental. And that fear is what put me over the edge. As of right now, Airbnb’s are being regulated and as long as you get the proper permits etc, you are in business. The city likes the tax revenue, so I don’t see it going away any time soon. But I am always a “sky is falling” mindset. I am trying to work through those fears (I get it from my dad...who has been successful, but a sure and steady kind of guy). I am really trying to work through some of the paranoia and trying to find other ways to find houses rather than the mls (I live in a pricey area that’s still hot and pretty well insulated).
Why did you decide to pass on the accepted offer? The first one is the hardest they say. I was 18 when I bought my first one. I was working at a Home Improvement store in Indianapolis. 40-60 hours a weeks at a job I enjoyed as an 18 year old. I lived at home with my parents while a lot of my friends were off to higher education. One night, I was up late and an infomercial caught my eye. Carleton Sheets, NO DOWN PAYMENT for $199. Does anyone else remember being 18 and thinking anything was possible? That was me! The course was designed to teach students how to purchase investment property within 50 days. February 2000 I picked up my first property in Twin Aire, Indianapolis, Indiana.
@David Rollings I calculated with Airbnb in mind and when I went through worst case scenarios and if it had to be a long term rental I would barely break even. I got massive cold feet and balked.
@Anita Anand here’s my wisdom and advice. I’d read or re read rich dad poor dad. I’d also read and listen to podcasts and get as much education as you can. Also don’t worry about what you can’t control. Do your best to take preventative measures but don’t dwell on it.
Positive thoughts: don’t think negative. Hope for the best plan for the worst. Everyone told me not to do real estate. I didn’t listen to them. And I was swinging 40% ytd in stocks!
Buy hold and rent is a nice wealth building safety net back up plan. I do recommend the webinars and the calculators; to run all your deals as a plan b on the rental calc. (Covered in a previous recent webinar) Good luck and take action. Focus on what you need to do and how you need to achieve.
@Anita Anand what market are you in? REI in many way is similar to many other opportunities, one has to apply for many jobs before lending one but you not going to get every job you interview for. Likewise, you have to follow the numbers and continue making offer. All will not get accepted, but one will. If they don't accept your offer at your numbers then move on. However, make sure your numbers are making sense and not low balling an offer. I make sure I have at least 15% COC and meet 1% rule. But, sometimes you don't meet 1% rule and still get 15% COC, if it is truly a value add. I just closed on a small apartment last week and this was the case. My tip to you is to identify your market, know the rents, taxes etc. Call houses listed for rent and ask if they would consider selling. Also make sure to attend local REI meetup, that's where I find off market properties like my last deal. No matter what, don't give up. Harder you work, more you will appreciate the house when you get one. It's not IF, just when. Good luck.
@Al Pat I’m in central va. Charlottesville. Plenty of investors here. I keep getting won out by them so obviously people are making money. I just need to get these negative thoughts out of my head and push through.