What has kept you from progress? (And did you overcome it?)

133 Replies

Originally posted by @Eric Stugart :

@Michael Ablan Hi Michael, I’m real ok y glad I saw your post. I too am a lone wolf and would rather do everything myself but everywhere I turn I read things that say to get a good team behind me. I am nervous about getting swindled or things going south with someone. Could you please tell me how you got out of your comfort zone and got a team together? What were the steps you took?

Eric, it's okay to start building your team at your own comfort level. You don't have to partner with anyone or give them any money. Just build relationships and talk to these people and learn from them and get referrals from them.

The more you engage with them the more you'll get to know some of them and eventually get a feel for who you can trust. Hopefully that will soften your fears.

And if there are people already in your life who you trust, maybe you can get a few of them excited about what you are doing even if just for moral support. Moral support and education is a great benefit of building relationships.

Read through this thread more. There are more posts about how investors built their teams. In fact, that has been the main theme of this thread so far.

Read John's post a couple of replies up. Just the act of starting and engaging may be enough to get you out of your comfort zone.

I know you said you are a lone wolf because you're afraid to team up. In what ways do you feel that not having a team has kept you from growing? And even though you are afraid, are you willing start building relationships to help you grow anyway?

I’ve cash, I’ve want ,i spent hours looking at zillow, realtor.com and few other sites, reading posts in BP forums and came to realize that unless you have access to mls, there is no deal good enough for you since “all” good deals are already gone bye the time it reaches the market.. wholesalers? No idea how to contact them? Real estate agents— idk i feel like mls properties which are going for lower prices never show up in my search :’(

Knowing that no property is good enough when it reaches these websites and Hearing contractors take 45% of the profits , 4% closing cost, 4- 5% selling costs .. has demotivated me.. losing home if investment is my thing at all..


@Lori Greene I do find and analyzed deals but I could probably stand to do it more often. I have also referred a few out without expectation of a fee. From my understanding because I have a real estate license any fees/commissions paid to me have to go through my brokerage. That isn't an issue but at the moment it has always seemed more important to sync people up with others that can help them with their situation.

The idea of saving up referral fees and moving up to wholesaling sounds like a solid idea. However, I don't really have much interest in wholesaling and I think it gets a little complicated with the real estate license. So I may not take that direct route but I am going to start being more active on BP, analyzing more deals, talking with people about it more and sending out more referrals. 

Thank you for taking the time to reply to my post. Your response was very thoughtful and inspiring. 




 

What is keeping me from progress is trying to turn the ship around at mid-course. I'm 45, have a great career that I really do like and have a wife and 2 teenage kids. We sold one house in town last year (stupid) when we realized that we wanted to live somewhere rural and bought a larger property in a rural community and couldn't find anything, we just stuck the money in the bank for a year while we rented. Then we finally found a house we would eventually buy this summer and had some room in the deal to build in the repair costs, but not quite enough. So we ended up putting about 8K on credit cards. This was also stupid, but necessary I suppose. Anyway after moving, I started listening to the BP Podcasts on my longer commutes and saw the error of my ways. I'm slowly trying to get my wife and kids to understand how we could have still had the same things and started building wealth instead of wasting it. I go through my regrets... If only I had kept the house in town, rented it out and got a Refi to fund the new place...If only we bought a new place that was better set up for multi-family or AirBnB.. But NO! I have to stop all that because we are where we find ourselves. What I am doing to move forward - found a local meetup, continue to listen to BP and read books. My wife is crazy for The 4 Disciplines of Execution now. We are talking about Financial Independence, Starting Businesses, etc. But I think my wife still thinks I'm crazy about my real estate ideas. I still comb stuff that is publicly listed. I'm interested in small multi-family at this point. My goal is to be able to buy my first investment property in 1 year.

Funny I see this thread first.

I just got done cancelling a portfolio refi loan at the last second because the underwriting requirements were getting out of hand.  I'm probably going to lose a significant portion of my expense deposit because of it, but I felt it was the right move. 

In the mean time I'm researching new lenders, and trying to find someone who will tell me everything needed to close up front.  I'm going to start making calls tomorrow after I wake up.

Maybe I'll start a new lending company from scratch that specializes in transparency.  In the mean time I just keep chugging along.

Originally posted by @Lori Greene :
Originally posted by @Lenny Almanzar:

I'm on the market to buy a duplex as an investment. My concern is not having any reserve for future repairs if needed. The duplex itself has a new heater and is well taken care. I'll be covering DP and closing cost. Which will then leave me without the reserve I'd like to have. I'll be house hacking in one unit for about a year or so. After all said and done I will be cash flowing right away as there is a tent with a 1 year lease well into 2020. After calculating vacancy and repair/capital savings, it will be a 10% cash on cash return. Not a bad investment by any means.

My hold up is deciding wether it is smart of me to purchase not having the cash reserve for future potential repairs. 

Lenny, it would certainly be better to have money for repairs. If the property cash flows, then put that money aside every month to build your reserve. The main point of buy/hold/rent isn't as much about cash flow as it is about building wealth while the appreciation and equity grows as the principal is paid down. And let's not forget the value of the monthly rent you don't have to pay while house hacking. Rent saved should be seen as income that can also go towards building your reserve.

There's a great article on BP about why it is so important to put money towards CapEx which is short for Capital Expenditures meaning repairs on appliances and wear and tear of the property: https://www.biggerpockets.com/...

The article shows you how to figure how much you will need to set aside each month.

Building a reserve by setting aside monthly CapEx is important enough that it's a part of most cash flow formulas including the BiggerPockets calculator and the formula I posted in my reply above to Amelia.

Is there any reason you can't put some of your cash flow and money saved on rent towards a monthly reserve?

Thank you Lori,

Putting money aside for reserves such as vacancy/cap ex should not be an issue considering I'd also be saving in what I would be paying rent in my apt. I also plan on paying myself for property management each month to save for reserves as well. 
 

@Jermell Shavers After reading what you said, I was wondering if you have your self employed business structured as an actual business. If you did, you could pay yourself an actual paycheck from the company on the books and show an income beyond your rental proeprties. That would go a long way in helping you qualify for loans. 

Your other comment about Hard Money Loans being risky may be correct, but only because they carry a higher interest rate. The thing about hard money is that you can calculate the cost of it into your budget for the deal. If you have your team ready to get the job done within 4-6 months for a flip or a quick refi, you'll be fine. HML's are designed to be short term. They are less interested in your credit history as they are in the equity in the deal. I think once you research the ones you might use and profile each one of them in depth, it won't be so scary for you to consider using them. They are not your best first choice, but they have their place. I mentioned this before, but I have no way of knowing whether you saw one of my previous posts. I've designed a Hard Money Lender Profile Sheet to help you complete that in depth profile of your lenders. If you want a copy, please let me know. Leveraging the cash you have on hand seems to me to be more beneficial than using it all up and then starting from scratch when you want to take on another project.

@Erik Baumer I am wondering if you are taking advantage of every possible way to search for deals. Where and how are you looking for deals. Maybe we can offer you some new ideas about where to find deals with numbers that will work. Also, are you making offers that work for you anyway, even if you aren't sure if the seller can or will accept them? Are you working with an agent or are you trying to deal with sellers directly?

@Ashley Clements My husband is not involved in my real estate investing for the most part becasue his risk tolerance is much lower than mine. He's supportive of what I do, but doesn''t help me with it. Perhaps you should have a new REI Savings account that he does not know about. Maybe if you could keep the one he knows about and start adding to another one, you'd be able to juggle his priorities on how to use that money with yours of wanting to use it to invest a little better. I don't think it is dishonest of you to do what you have to do to follow your dreams.

Originally posted by @Jan Kerr :

@Erik Baumer I am wondering if you are taking advantage of every possible way to search for deals. Where and how are you looking for deals. Maybe we can offer you some new ideas about where to find deals with numbers that will work. Also, are you making offers that work for you anyway, even if you aren't sure if the seller can or will accept them? Are you working with an agent or are you trying to deal with sellers directly?

MLS, Zillow, auction.con, hubzu.

I have an agent that is working side by side with me but no access to off market deals. I will work with other agents and give them the listing on  the back end but that hasnt produced anything.

Just last week I started working on a marketing plan to source my own deals will take some time to get running and produce anything.

Have not found wholesalers who leave enough meet on the bone for flips or value add rentals.

Market is very competitive and saturated where I am.

@Erik Baumer Off market deals are everywhere. Here are a few ideas for you: Find ways to advertise to the potneial sellers in distress or owners of distressed proeprteis so that they know you are there to help them. Get local information about pre-foreclosures and reach out to the owners directly in a helpful way. Get others to bird-dog for you to bring you deals for a small referral fee if you get the properties they bring to you under contract. 

Originally posted by @Jan Kerr :

@Erik Baumer Off market deals are everywhere. Here are a few ideas for you: Find ways to advertise to the potneial sellers in distress or owners of distressed proeprteis so that they know you are there to help them. Get local information about pre-foreclosures and reach out to the owners directly in a helpful way. Get others to bird-dog for you to bring you deals for a small referral fee if you get the properties they bring to you under contract. 

 Yes!! This part of the new marketing plan. I appreciate your advice and help. 

Originally posted by @Eric Stugart :

@Michael Ablan Hi Michael, I’m real ok y glad I saw your post. I too am a lone wolf and would rather do everything myself but everywhere I turn I read things that say to get a good team behind me. I am nervous about getting swindled or things going south with someone. Could you please tell me how you got out of your comfort zone and got a team together? What were the steps you took?

I found it easier to begin by letting go of tasks where I derived little to no enjoyment.  These were tasks that I'd put off or would half *** because I hated doing them so much.  

One specific instance is swinging the hammer.   I learned how to do it, and was decent at it, but I didn't enjoy it.  It was completely out of my realm of expertise. I was slow at doing it (because I had to learn EVERYTHING from scratch) and it took me away from doing what I actually enjoy/am good at.  So I took on an equity partner who is a wizard in construction.  We have the same mindset, work ethic, goals, and many of the same core strengths, but he's SUPER strong in the things I'm SUPER weak in, and vice versa.

So maybe start there.  Identify what you hate doing, and unload those tasks to someone who loves doing them.  

 

@Nida Hussaini Here is what I suggest...

You have to expand your thinking process. Decide how badly you want this. If you want it badly enough, you will become more determined and not let delays or disappointments stop you from moving forward. Persistence is the only way to be successful in this business. If you give up, you will never know what you could have accomlished. 

Sometimes you have to do a little leg work. Not everything you need will be found easily on line through established sites like the ones you listed above, becasue like you said, they get picked over pretty quickly. Get creative and know that there is a way around, over, under or through every obstical. Toughen up , ask for advise when you need it and never look back.

Here are a few ideas for you: Find ways to advertise to the potneial sellers in distress or owners of distressed proeprteis so that they know you are there to help them. Get local information about pre-foreclosures and reach out to the owners directly in a helpful way. Get others to bird-dog for you to bring you deals for a small referral fee if you get the properties they bring to you under contract.



My current hurdle is the thought of homes being cheaper next year. While I currently own 2, I would love to buy another but each month I view them they seem to be $2000.00 cheaper in the greater Denver area.

@Lori Greene

Great question. For a lot of people including myself it was “Ego” and desperation. Ego because you’re not willing to do things that are “below you”. The truth is nothing is below you, not even working at McDonalds. Becoming wealthy is usually a boring process.

And desperation because it’s hard for people to focus on the secret to success in business which is genuinely trying help people which is hard to do if you are broke and desperate, over worked and underpaid.

Luckily I learned these lessons young.

Good luck!

@Lori Greene for me is that I dont have a system yet. I don't know any good contractors and fear of if doing BRRR and maybe contractors don't do what I need on time and well done. Also not sure if I'm supposed to have a deal before using hard money or if I am supposed to have hard money before finding the deal. It is hard when you are trying to figure out things alone. I wish I could have a mentor but that also cost money and the capital I have I need to use it to get my next property....

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