What's holding you back from buying your 1st investment property?

264 Replies

Originally posted by @Trenton Doss :

The biggest thing holding me back is funding. I'm a licensed real estate broker/property manager and I have the skills to acquire and manage properties myself. However, I don't have a down payment and I don't have access to private funding or accredited investors. I even have a PPM but no investors. 

 Why do you say you have "no access" to private funding/investors?  They're everywhere.  I can't tell you how many times I've gone up against some new group when trying to buy an apartment.  It's some n00bs who never bought anything, don't have any $, but using OPM they outbid me by a huge amount (maybe because they're not as concerned with a return given it's not their precious down payment bullets)

I have some questions on 50/50 partnerships. I'm trying to figure out how to set that up legally. This is in regards to dividing profits and protecting each other.  Can anyone advise or provide links to advice on this?

My biggest hurdle right now seems to be identifying where I want to invest.  I'm trying to find areas that aren't over saturated but also have mild climates or little/no snow.  Arizona is an area I personally like and would love to move to eventually, but that market seems like it's exploded so much that I've already missed the boat.  I have 30k in cash along with 200k in equity in my home that I can deploy, but I just haven't found a spot that's affordable and has the mild climates I'm looking for (for some reason in my head I feel like milder climates would lead to less overall expenses). 

I really want to purchase a property this year to start my journey but I just feel stuck at this spot.

Cody L

I'm new to the funding aspect of real estate investing. That's part of the reason why I'm here. I want to network and learn some new tools the trade so when I have a great deal, I can hop on it asap.

We have a couple rentals and would love to have more. The problem now is funding. How do you get a 25% down payment besides slowly saving up? We refinanced our primary home for the last investment property down payment, so that's no longer an option. 

@Konstantin Gradushy - Yes, Denver is crazy hot (ironic!).  What about any of the surrounding town/cities?  Greeley, Fort Collins, Colorado Springs, Boulder, Grand Junction?  Could any of those be had cheap enough to cashflow but with appreciation upside in the future as more and more get priced out of Denver?

@Mike Hokenstad - asking prices are just that...."asking".  That doesn't mean they will get it.  If you think a property is worth 30-40K less, offer that.  Find a realtor that is investor friendly and willing to put in multiple low ball offers.  The more you put in the higher chance you have of getting a yes.  As with many aspects of real estate... it's a numbers game.

@Salvatore Lentini

Deciding which city to focus on has been our most difficult hurdle. I live in NYC, but it's too expensive to invest in a property here. I want to focus and invest in another city/state that would have a lower point of entry and a greater ROI.

@Salvatore Lentini first I would like to say thank you for doing this! I don't know what route I want to take. I feel like I want to flip first so I can get the hands on experience with dealing with a rehab and to get me get some pocket money to buy more rental properties. Because now I feel like my biggest issue is funds and finding a partner that will pay for rehab, due to me not having much to offer to a potential partner because of my lack of experience. Which is why I want to kind of go the BRRRR strategy first, but I fall with the same issue, funds for rehab. I am currently working on closing on my primary residential home so that is where my funds are going to now. Question for you is 1) what kind of niche did you do for your first deal and 2) how did you fund it? Thanks in advance!

HI @Dara Thomas - What do you mean when you say you're really scared to see how problem #2 will work out for you?  Having a full time job while real estate investing doesn't have to be a negative.  It can definitely be a positive.  You can qualify for loans easier with W2 and you can build a rental portfolio while you continue to make a salary.

Just joined BP not even 15 minutes ago and this post already hit me like a ton of bricks. I've read dozens of books on REI and started listening to BP Podcast. I'm a total newbie at this! I'm 24 years old and have never even bought a house yet! I think the biggest thing that stops people from buying there first deal is the fear and uncertainty of it all. For me, I think its the fear of not knowing every step of the process. Is my math going to be correct? Did I forget to account for an expense? How do I know how much closing costs are going to be? I think the best thing for a beginner is to fully commit your time and energy on step 1 and 2. Educate yourself, and analyze properties every day until you can do them with your eyes closed. Once you have that confidence you can begin taking the next few steps of the process.

Originally posted by @Craig Castro :

My biggest hurdle right now seems to be identifying where I want to invest.  I'm trying to find areas that aren't over saturated but also have mild climates or little/no snow.  Arizona is an area I personally like and would love to move to eventually, but that market seems like it's exploded so much that I've already missed the boat.  I have 30k in cash along with 200k in equity in my home that I can deploy, but I just haven't found a spot that's affordable and has the mild climates I'm looking for (for some reason in my head I feel like milder climates would lead to less overall expenses). 

I really want to purchase a property this year to start my journey but I just feel stuck at this spot.

Each area has its pros and cons. Some of the set backs with milder climates (Oregon is considered mild) but it rains a lot here and the constant rain creates a lot of damage quickly if you're not on top of it as a homeowner. Great for investors looking for flips though. More mild climates or warmer climates might be more expensive and you'd be paying more for something because demand is higher. So your savings on "less maintenance" are really just paid upfront in the cost of property or in higher energy bills.

just a thought.

 

Originally posted by @Robert J. :
Originally posted by @Craig Castro:

My biggest hurdle right now seems to be identifying where I want to invest.  I'm trying to find areas that aren't over saturated but also have mild climates or little/no snow.  Arizona is an area I personally like and would love to move to eventually, but that market seems like it's exploded so much that I've already missed the boat.  I have 30k in cash along with 200k in equity in my home that I can deploy, but I just haven't found a spot that's affordable and has the mild climates I'm looking for (for some reason in my head I feel like milder climates would lead to less overall expenses). 

I really want to purchase a property this year to start my journey but I just feel stuck at this spot.

Each area has its pros and cons. Some of the set backs with milder climates (Oregon is considered mild) but it rains a lot here and the constant rain creates a lot of damage quickly if you're not on top of it as a homeowner. Great for investors looking for flips though. More mild climates or warmer climates might be more expensive and you'd be paying more for something because demand is higher. So your savings on "less maintenance" are really just paid upfront in the cost of property or in higher energy bills.

just a thought.

 

You're absolutely correct on that.  I've been trying to find areas with little rain too and I think the main reason for that is the wear and tear on a bigger ticket item like a roof, but I'm sure the trade-off with that is warmer climates would likely need more HVAC work which is just another big ticket item that can potentially go bad too.  Another mental block for me is I'm trying to think of places that I, personally, wouldn't mind living and I know I need to stop thinking that way.  It's not a house or location that I'm going to live in.