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 ;)!
Real Estate Agent · Dayton, OH · Member since 2015 · 86 posts · 36 votes
7y
The first deal is the toughest because everything hinges on that one deal. As you grow, your emotional impact from each deal changes drastically. On your first deal, any negative emotions are greatly felt, because they are the only emotions being generated by your portfolio, conversely with positive emotions though, thankfully. As you get your second and third deals, then you may have something go wrong, and it's outweighed by something going right, which will balance your emotions. The more you have, the less you are emotionally bound to each one. You do have to take the "calculated leap of faith" and understand that it might not work out perfectly in the beginning, but it will all work out in the end.
Rental Property Investor · Farmington, UT · Member since 2018 · 171 posts · 148 votes
7y
@Anita Anand over time you just get calloused and somehow comfortable with the pain/stress. That’s the honest truth... I used to get super anxious over sending a very small down payment on a house hack. I had the same feeling, no bigger when I bought a duplex cash a few months ago. And I’m guessing the next time I do something similar it will barely faze me. It’s all growing your comfort zone. Nothing more.
Rental Property Investor · Orlando, FL · Member since 2019 · 105 posts · 71 votes
7y
@Anita Anand
There are 4 major phases in the investor journey.
1. Recognizing that investing is a great idea
2. Establishing the will to invest
3 education: not gurus but understanding your market. Can you recognize a good deal?
4 Having the ability to pull the trigger quickly.
You know exactly how to finance, control it, or hold it.
The way to crush anxiety is to leave minimal space for uncertainty. Winning at this game is about executing your strategy. Every deal won’t be the same but if you approach this as a business with systems, you can avoid heart ache and bleeding money.
Many market across the US are hot, don’t know where you live. My best advice is that you spend 10x as much time understanding your target market and narrow down your criteria with laser focus.
This will make you an expert in your area. It would put you in a place where you can easily identify the opportunity before everyone else.
Seasoned investors are not lucky, we stay on the path and always find opportunity along the way.
Property Manager · NJ · Member since 2017 · 786 posts · 396 votes
7y
@Account Closed What really helped me to get started was belief in REI as a true way to build wealth, I then began to build a solid team around me all while analyzing a ton of properties, and speaking to anyone who had experience with REI all of this helped to give me the feeling I was heading in the right direction, after that I dove right in, they say a journey of a million miles starts with one step, so I decided to push forward.
You'll have a ton of emotions as you go through the process of building your portfolio and that's ok, each offer, purchase, reno etc has its own set of challenges but it gets a bit easier as you go. Focus on the end result and your ultimate goal as an investor especially when times get tough, that may help you push through a rough patch
Philadelphia, PA · Member since 2017 · 824 posts · 1k+ votes
7y
I was fine during the offer period. In fact we had delays on both sides that almost nixed my first real deal. I was cool, calm, collected, and level-headed through the whole thing. The seller sent all kinds of threats to me and I just laughed it off. The problems weren't my doing, and not mine to solve. There were issues with certificates, flood insurance, underwriting...on and on. But it wasn't a big deal -- either the deal would go through or it wouldn't.
Where did I start to lose it? Tenant management.
I loved showing the property, getting it ready, screening tenants, talking to them -- its no different than my job as an operations guy.
Wheels came off when I got a good but needy tenant; there was always something wrong and something to pay for. Each time, my blood would boil a little more. I was trying my hardest and my tenant was downright rude to me. I'm used to it -- I work in IT where almost everyone's got a complex of some kind. But something about these exchanges -- little bullcrap issues that would necessitate super long texts or hysteric phone calls, then trying to solve these little problems with professionals I don't have a good relationship with and couldn't personally manage. One day, I reached out to my agent to see what putting this house on the market would net me...it's only been a year, so not a whole heck of a lot. I'd be lucky to break-even but more than likely, I wouldn't.
I was lucky to have met another investor and his property manager around that time, and I signed her up a few months ago. Best decision I've ever made. She knows almost every tradesperson in the city, knows all the folks at the housing/inspection office, knows people in town looking for housing, etc. And I get to talk to another business person about business items, not angry tenants or non-complaints about a bunch of nonsense. I found my weakness -- its tenant management (and here I thought I would be awesome at it, haha) and I moved to control it.
Point of my story for OP and anyone else -- these are investment vehicles. If you don't want to do the work on the properties, or you don't want to manage tenants, or you don't want to deal with housing authorities, or don't want calls at 2 AM, or whatever it is that is associated with these investment vehicles, then you need to prepare both operationally and financially for someone else to deal with it. And you need to approach it as clear-as-day as possible.
Eagan, MN · Member since 2018 · 32 posts · 17 votes
7y
@Anita Anand
I’m also starting out and agree that it can be an emotional roller coaster! I’m looking at a “Smelly Mansion” (as I have dubbed it) as a live-in flip. Try to remember to trust the numbers and your homework, whether that calls for walking away or putting it under contract. As BP has said time and time again, only a very small percentage of offers are accepted and lead to a deal.
Rental Property Investor · NY · Member since 2018 · 571 posts · 332 votes
7y
i'm about 1 year into RE investing, and i can tell you i'm really discouraged right now... i have some drama going on with my PM right now and its just draining too much energy from me, especially with vacancy issues that is not being addressed by them... maybe i just need to look in a different market.
@Anita Anand Maybe you just have not found the right deal yet. It's A LOT of money here in So Cal, and there is a significant risk. Don't feel bad about backing out and feeling regret. It might be it was just too risky.
Investor · Member since 2019 · 59 posts · 73 votes
7y
@B Wooldridge thanks for sayin that. It wasn’t a great deal, but it was a good deal if the Airbnb worked out. I do feel bad about it, but I need to move on. The feeling has consumed me, but I think it’s good because the regret feels worse than the anxiety.
I feel you - going through a first deal myself right now. Money will be tight, it's not a slam-dunk and construction costs are so high. Not getting a lot of sleep lately!
Rental Property Investor · Centralia, WA · Member since 2017 · 75 posts · 85 votes
7y
@Dennis M.
Thanks for the comment. This year and last year were bad for that one property I had mentioned. If it weren't for the Section 8 tenant in the other unit paying just the mortgage, I'd have to use my own funds. However, I had to cover all the repairs from that troublesome tenant. I talked to my PM yesterday and it's looking like come November I should be getting back to "normal" receiving rent/profit. And I'm closing on my fifth property at the end of this month, with possible tenants next month, and receiving rents by December. So, by December I should have (hopefully!) all rents from all properties 100% or close to 100% for the first time in a long *** time. If that happens, I'll let things settle down and prepare for property #6.
Thanks for giving me a reality check! Good luck to you as well!
Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
7y
There isn't anyone 'better' than you. That doesn't exist. If one person has done it, you are completely capable. You have to want to make it work more than you don't. It's really that straight forward. To accomplish that, you have to be focused, driven, honest with yourself/others and hard working.
Investor · Member since 2019 · 59 posts · 73 votes
7y
Thank you all so much for the encouragement! We are moving forward and learning and hopefully will have some deals under our belt soon, too. Since I last posted, we met with our mentor (who is amazing and I feel it will be the best money we have spent)...and I liken it to my gym membership...we pay a lot but I get a hell of a lot more out of it.
Since then, he has brought us a subject to deal that we are currently crunching the numbers on. May ask for advice on that, but just wanted to say thanks for not dumping on me, but giving me your kind and generous words!
Los Angeles, CA · Member since 2018 · 14 posts · 3 votes
7y
Also to add, if someone has not already said, we decided to invest in a less expensive market OOS, to minimize risk. I'd rather cut teeth on a small property and be out $15-20k vs trying to invest here in, say, SoCal and potentially lose hundreds of thousands. And now, I am confident in our ability to analyze and invest in different markets and am even expanding to other asset classes.