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 ;)!
@Anita Anand I can relate , how I overcome business fears after doing all the things I can do mentally is to keep it in my heart ... the believe that life will always go on , heavens will not fall. Face it , the 'what ifs' voice will find there way out ...
Analysis paralysis - I think you’re trying to hit a grand slam right away.
The first deal can be as much about learning the ropes and figuring out what not to do instead of creating an overnight success.
You will always have doubts. I bet some people on this thread have doubts about deals that turned out great! What they didn’t do is let doubt overcome taking action.
@Anita Anand hi Anita, I had been thinking of buying an investment property for a whole year but been in the spiral of " what if things go wrong?". I can happily tell you that reading so many success stories at BP made me look at what is the upside of buying a rental property made me plunge. I closed on my first rental property May this year. I did crunched the numbers and had a "good" contractor on my side which made this journey so much easier. And I can happily share that it's much easier to see that passive income coming in. As I have heard on BP from so many investors, move forward...
I am sure one property at a time, it'll continue to get easier.
I want to thank you all for encouraging me and sharing your stories. I am feeling full of regret, but I know I must dust myself off and be armed and ready for the next one. I need to kick my fears and what if’s to the curb. Thank you for the time you took to share with me.
When you watch from the sidelines for years, with only stories from other investors and cable TV shows that are more drama than reality, you don’t get a realistic understanding of real estate as a business.
You will quickly come to find that when you are small, nothing happens without you being involved. If you get overly emotional about every decision, success or failure, you will drain yourself emotionally.
If you have done you legwork properly you should be happy to get a property you bid on but not for any more than a price that makes sense to produce a profit under your business plan. The person that over pays for a deal is the first loser, they just don’t know that at the time.
Start investing the time and resources to build a pipeline of incoming deal prospects outside the MLS. When you have to bid against the open market, you will always have to pay more.
One of the guy on the podcast summed it up best by sayin Investing (buy and hold) in real estate is like being bipolar. Some real highs and some real lows....not much in between. I bet 99% of the offers we make are failures. The majority of the deals we have closed aren’t what I would consider great. Sure, I wish I was a better at this all the time! I’ve been doing this for years and years and I hear about guys right out of the gate crushing it harder than I am. You don’t have to be great at this but you must be persistent. Learn to see the beauty in the failures that bring you one step closer to that home run!
@Account Closed taking the first step is hard, but be aware there is much more difficulty ahead. Many people get out of the rental business as fast as they get in. They underestimate the work involved and the potential for bad things to happen. I thought my first fire was challenging, but then I had a second fire and a third fire. It would have been emotionally easier to sell after those experiences and many people would have. We chose to push through it.
My point is getting started is much easier than lasting in this business 5, 10 or 15 years. You may have heard reference to old, tired landlords. Well they were all once starry eyed investors looking to make riches in real estate.
Always hope for the best and plan for the worst. You can never have control over everything. Remember if you have strong reserves, you can ride out any market. Real Estate is long term, so don’t view it with short term goggles.
@Anita Anand I’m in a similar spot as you. And the one thing I noticed is that you need to build the funnel as others have mentioned. Once you find the deal run the numbers and see if it’s meets your cash flow requirements. Some of the realtors you find might discourage you because they do not know how to deal with investors and not willing to help.
1. Find the area you want to invest in.
2. Build a team (property manager, realtor that’s investor friendly, contractor if not doing to work yourself)
3. Find the deal & crunch the numbers ( don’t just focus on Airbnb also check potential rents so you have options)
4. If it works put an offer in and stick to the numbers that work for you.
I’ve made a few offers and none accepted yet. Sometimes I think to myself maybe this is not for me, but I keep trying knowing the right one will come. Also it’s a tough market right now.
Man, the first deal I did was the purchase of my primary residence and it was pretty scary. I felt better b/c I lived with roommates and 1 roommate was going to move in with me so it made my piece of the mortgage about the same as my part of the rent I was currently paying (you’d think that would put me at ease) it was still scary. A year and a half later I purchased a tri plex and I had trouble sleeping the month and a half before closing, and after I purchased it. I’d wake up with night sweats, I had anxiety, I’d be sick to my stomach often. When I look back and ask what was it that kept me going and move forward with my second deal that I was so worried about, I see two things.
1.) my why- I had a plan that I wanted to own multiple “doors” that were completely paid off so I’d be financially independent to the point that I could offer apartments to people homeless or in a bad spot, with a program that would help get people off the streets and financial independent. That meant they could find a job that would sustain a place to live with all living expenses.
2.) I looked at worse case scenario (this may help or not?) but I considered if I fell on my face, went bankrupt and lost everything what would that mean? Well I know I could fall back on my first property, and live there, it was a small mortgage. I had a job I wasn’t going into real estate full time so I knew I would have income. Failing didn’t mean I’d be living under a bridge with nothing to eat. Failing ment I’d probably have to file for a bankruptcy, loose the multi family, and go back to start, get humbled and figure things out from there. Because I was so stressed and anxious this actually helped me, you’d think the way I was feeling it was a matter of life or death but when I put it in that prospective it helped.
Today I’m not a millionaire (yet) but that first property I purchased I just sold last month and made 125k I purchased another home after the triplex rehabbed it and make about 80k. I still have the tri plex and I’m looking to sell it because I now live out of state but these scary decisions in the end changed the course of my, and my family’s life. Focus on your “why” not the problem, and consider worst case scenario you should have several exit strategies.
That’s right Karl. People just need to go for it! Take action, stumble, fail.... and you learn more than what college will teach you. Buy assets, smartly of course. 😎👊🏽
There is a big stigma in my circle of friends, and family that having rentals is a nightmare. When I asked each of them why it usually goes something like I knew a guy or I heard about someone that had a tenant that trashed the property. Or it's just too much work. Usually I explain to them part of it is screening your tenants and that won't catch 100% of them, but should get most of them. Also if you take the time to take care of repairs and thoroughly go through the unit you will have less problems in the long run. Once I buy a property I replace any water softener or water heater older than 10 years. AC and furnace gets cleaned and inspected by a professional. You would be surprised how many people miss things like that and pay for it in the long run. People are just plain lazy too. Lots of tax benefits to owning real estate too. It comes down to saying yes you want to learn about real estate and actually doing it. You can talk to people til they are blue in the face, but until they fully commit to it there isn't much you can do to sway them.
On the flip side to that what you can do is show them your success and how with some hard work and even some money they too can become a real estate investor making money. Proof is in the pudding. When they hear you made 20k just in cash flow last year with 4 houses and someone else manages all the properties for you that kinda makes them do a double take.
I have a relative that started about 25 years ago. He retired at 55 and he is a multi millionaire. He took his family on over 6 trips this year most of which were at least 3 weeks long or more. Everyone told him he was crazy and he would be bankrupt. Sadly he doesn't talk to anyone in the family and it created a big rift in his family. Believe it or not he is still buying properties, but with cash. One of his kids is slowly learning the ropes to take over someday. It's a wonderful thing to keep in the family or pass on to your kids.
@Anita Anand this doesn’t necessarily apply directly to real estate but as an old stock trader we used to say “do buy into anything you wouldn’t mind holding forever if you had to”.
An escape plan will eventually come around even when things go South.
@Anita Anand The Hardest part for me when i started was the Unknown and lack of confidence i had because of my inexperience.
However, the more u practice in this business as in anything else the Better u will become and when u get that momentum built up, it just really gets going as u start to get the hang of it !
Feelings are normal, the trick is to not let ur feelings hold you back and remind urself why u started this journey to begin with !! Good luck and Dont Quit !
One of my favorite quotes as well Chris. I hope it provides the original poster some mental fortitude as it has done for so many others (myself certainly included).
@Anita Anand i started my journey again back in April. Since the. I put in zero offers just because of that, fear of rejections, fear of making a mistake, fear of what other people might say. You know what, you just inspired me to go submit my offers today, because getting rejected doesn’t sound that bad. You broke the ice and now, and you are a step further than most people who say they are in the “Real Estate business”. 10 offers equals at least one accepted offer right, you have at least 8 more tries and after that if you still don’t get an offer you hit the reset button look at the numbers again, look at the market, see how your offer letters could improve, are you just throwing a number out there or are you offering a solution to their problem. Be creative, yesterday I thought of a guy I was talking to about selling his home. He was a motivated seller that we had scheduled a walk through. He wanted to go to Florida leave everything behind to join a band with his friend. His health wasn’t great and from what I can hear over the phone he was depressed. He canceled the walk through and never called back. I could imagine he was embarrassed or scared of change. Today I’m going to call him and ask him, “hey I’m going to get you to Florida before the first snow hits, what can we do to make that happen?” You see, build report with the sellers and figure out what makes them tick and work out a plan to make them say yes! You can do this Anita, please don’t give up!
The aversion I had to slogging out 30+ years in a JOB was more of an incentive than the fear of failing in REI.
I jumped in when rates were 18-19% & could only afford barely livable properties & some were owner financed @ 19% just to get in. I had to constantly rehab & rent rooms in every property just to survive. Staying 'focused & frugal' became my dictum.
I had colleagues & those I worked for 'constantly' ridicule my ventures & yet somehow I prevailed. I drove a vehicle that was ridiculed & no-one would ride in & I was always broke.
Within 10 years I had retired & had accumulated quite the portfolio, but not without a few expensive mistakes. Many of my colleagues worked past 65 then took part-time JOBS hoping to afford retirement.
The many errors & instances of poor judgment have quickly dissolved into my fading memory & yet the accumulated free & clear portfolio has negated any chance of a reversal & confirmed my resolve.
@Account Closed cold feet. I am feeling all sorts of regret. But I feel like maybe this had to happen, because I feel awful and perhaps even more awful than had I gone through. After reading the comments, I feel like we just need to jump. Alas, not one thing was gained by not jumping.