Worried I won’t be able to get in the market
New to Real Estate · Auburn, AL · Member since 2020 · 26 posts · 15 votes
Worried I won’t be able to get in the market
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Brad HammondBusiness Member
Real Estate Agent · Portland, OR · Member since 2016 · 1k+ posts · 605 votesHey @Isaac Gwin, I think it depends on who you listen to. While some people have been calling for a correction for 10 years, others have said things are going to stay hot. I would research why people are saying what they are saying and come to your own conclusion.
As for getting started, I think it is imperative to purchase something ASAP. I started with a condo in Denver. It was a stretch for me but it got my foot in the door so I could eventually move up into something else. Real estate has always been expensive and will always continue to be expensive so in order to be in the game, you need to get off the bench.
63 Replies
- 5yBrad HammondBusiness MemberReal Estate Agent · Portland, OR · Member since 2016 · 1k+ posts · 605 votes
Hey @Isaac Gwin, I think it depends on who you listen to. While some people have been calling for a correction for 10 years, others have said things are going to stay hot. I would research why people are saying what they are saying and come to your own conclusion.
As for getting started, I think it is imperative to purchase something ASAP. I started with a condo in Denver. It was a stretch for me but it got my foot in the door so I could eventually move up into something else. Real estate has always been expensive and will always continue to be expensive so in order to be in the game, you need to get off the bench.
- 5yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
The world has been filled with the voices of doomsday since the beginning of time. Stop reading their rants and predictions. They've been predicting this doom for the following year for the past 2 decades. When/if it happens, they will be proclaimed experts in their field. I guess if you can make it into the MLB Hall of Fame being right only 30% of the time, you can be declared an expert being right less than 10% of the time.
The answer isn't to wait for the crash. The idea is to make money during it. Learn to do it right.
- Lender · Raleigh, NC · Member since 2017 · 35 posts · 20 votes5y
@Isaac Gwin Have you been analysing any deals? If I were you I would look around the market on what is listed to get an idea for yourself. Don't get caught up on what may happen and when with the market all that much. The beauty of real estate is that every deal is different and there really aren't any two that are alike. Look around and see for yourself if getting into the market now makes sense. If yes, then go for it! If not, then waiting might be a good option for you. Just because prices have been souring does not mean that you can't find a motivated seller to give you a deal on a project that they want to sell, for whatever reason. You would be surprised at how many people have good properties but just want to sell them without any headaches!
Reading books is a great start, but nothing will beat searching for properties and contacting people! There are plenty of creative ways to find deals as well, you just have to be willing to look! Hope this helps :)
- Member since 2021 · 154 posts · 108 votes5y
With our current president and politics, push for inflation and raising taxes, the housing market will continue until there is an eventual correction. I suspect we have another 3-6 years of this market.
- New to Real Estate · Auburn, AL · Member since 2020 · 26 posts · 15 votes5y
@Brad Hammond
Thank you for your advice!Makes sense! Trust me, I would be taking action with buying properties right now if I could - I go to the Air Force Academy, and am not allowed to own any property whatsoever while I am still attending school there! Bummer, but we'll just have to make it work. Personally? I'm not seeing this market sustaining much longer as interest rates rise and supply being so low unless builders grind out homes like no tomorrow to meet the demand. I know they're starting to in my hometown of Austin.
How do I get over the apprehension of a crash, especially as a newbie? If I had the portfolio and the experience I would be much less nervous, but I can't shake the feeling of buying a property in my first year then boom, crash happens, I can't find tenets, finances are in trouble, etc. I'd make sure my finances are in order before buying any properties of course. - New to Real Estate · Auburn, AL · Member since 2020 · 26 posts · 15 votes5y
@Joe Villeneuve Thank you for your advice! I defenitely want to gain experience so if the market crashes I can buy properties cheaply. I just need that experience first!
- New to Real Estate · Auburn, AL · Member since 2020 · 26 posts · 15 votes5y
@Matt Buroni, thank you for the advice!
I have not analyzed any deals as of now, I had a good couple months where I was reading a good amount of books then I had to focus on the academic and athletic demands of college life. Luckily, I have a very good friend who goes to school with me, and she has a lot of good connections in the real estate world - she knows how to analyze properties and can teach me, we want to go into business together!
Just looking around in potential markets I'll be in I think I want to wait. Properties barely last a day or two on the market and I can't compete with cash buyers who go $100k over asking price. I maybe have $6k to my name right now, but no college debt which is a huge blessing.
If market deals don't work I'll have to go off market or just network with people and ask their opinions! Whatever it takes to get my foot in the door.
- Real Estate Agent · Rosemount, MN · Member since 2019 · 31 posts · 16 votes5y
@Isaac Gwin I believe that we need to keep our eyes on the long term. As long as you’re being smart about financing and the building you buy the long term says you will be fine. The market could stay hot for a while and some markets are starting to see higher inventory resulting in a bit of a correction. Research research research
- 5yBrad HammondBusiness MemberReal Estate Agent · Portland, OR · Member since 2016 · 1k+ posts · 605 votes
Originally posted by @Isaac Gwin:
@Brad Hammond
Thank you for your advice!Makes sense! Trust me, I would be taking action with buying properties right now if I could - I go to the Air Force Academy, and am not allowed to own any property whatsoever while I am still attending school there! Bummer, but we'll just have to make it work. Personally? I'm not seeing this market sustaining much longer as interest rates rise and supply being so low unless builders grind out homes like no tomorrow to meet the demand. I know they're starting to in my hometown of Austin.
How do I get over the apprehension of a crash, especially as a newbie? If I had the portfolio and the experience I would be much less nervous, but I can't shake the feeling of buying a property in my first year then boom, crash happens, I can't find tenets, finances are in trouble, etc. I'd make sure my finances are in order before buying any properties of course.When you say crash, are you talking about housing prices? If so, as long as your property cash flows, it doesn't really matter. You can always wait out the market until it rebounds. Are you worried about rental prices crashing? I haven't seen that in my 15 years of investing. If you are worried about not being able to rent it, I understand that fear is always in the back of my mind. Make sure it is clean, safe, and has a fresh coat of paint. You might need to discount the rent by $50 or $100. Do a stress test on the property. If you can make it work for a year or two with the reduced rent, you can make it long-term. Having a strong cash reserve (or partnering with someone who does) will ensure you can make it through an issue.
- Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes5y
When I moved to the Bay Area in 1995 and bought my first house in 1998 I was horrified at the prices and my stomach churned as I paid a grand sum of...wait for it...$330K for a a 4 bedroom ranch house in San Jose. It took all our cash and then some to pull that off. What do you think that house is worth now? I dont know but Zillow says about $1.5M. My point is every market looks scary at every point in time. Even in 2009 when houses were going a begging people were scared to get in. You are young. The biggest asset you actually have is time. Time for assets to grow. Time to make mistakes and recover. Less responsibilities to kids and families. Take a risk. Whats the worst that can happen?
- 5yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Joe Villeneuve:
The world has been filled with the voices of doomsday since the beginning of time. Stop reading their rants and predictions. They've been predicting this doom for the following year for the past 2 decades. When/if it happens, they will be proclaimed experts in their field. I guess if you can make it into the MLB Hall of Fame being right only 30% of the time, you can be declared an expert being right less than 10% of the time.
The answer isn't to wait for the crash. The idea is to make money during it. Learn to do it right.
last year this time there was a gentlemen in Vegas who was big into restaurant and such there.. who was predicting a worse crash for Vegas than the GFC.. I mean he was Mr. Doom and Gloom.. well Vegas not only survived but values rose 20% or more at least our props did. And rents never missed a beat and went up.. Now its back to full swing based on the 10 hour traffic Jam on Monday going to back to LA on the 15.
- 5yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Account Closed:
When I moved to the Bay Area in 1995 and bought my first house in 1998 I was horrified at the prices and my stomach churned as I paid a grand sum of...wait for it...$330K for a a 4 bedroom ranch house in San Jose. It took all our cash and then some to pull that off. What do you think that house is worth now? I dont know but Zillow says about $1.5M. My point is every market looks scary at every point in time. Even in 2009 when houses were going a begging people were scared to get in. You are young. The biggest asset you actually have is time. Time for assets to grow. Time to make mistakes and recover. Less responsibilities to kids and families. Take a risk. Whats the worst that can happen?
Exactly when I sold my house in Palo Alto to move to Napa valley I knew it could never go above 500k... LOL try 3 mil today.
- Appraiser · Clovis, CA · Member since 2014 · 16 posts · 11 votes5y
@Isaac Gwin I know you are really smart and disciplined because you got into the Air Force Academy. My suggestion would be to keep learning, block out the doomsday forecasters, and save up your cash as much and as fast as possible. Practice analyzing deals now so that you'll know what a deal looks like when you can buy your first property. Might even be fun to make a few hypothetical deals of real properties for sale today and keep track of how you would've done in a year, two years, etc. Might serve to ease your anxiety when the time comes to deploy that cash you've been stockpiling in the meantime.
Best
- Flipper/Rehabber · Lancaster, PA · Member since 2019 · 4 posts · 7 votes5y
@Isaac Gwin, when is the best time to plant a tree ? It was 20 years ago , so when the second best time , the time is now ,, The key is action , action and action , pa f you wait till you know everything , you will never gets started becuz theirs always something else that comes up ,
Ask anybody that’s been doing it for any period of time , and 9 outta 10 will tell their was always something going on that people where tellingthem they shouldn’t invest , either you invest or you don’t, you can’t do both !
- 5yPatrick DruryBusiness MemberReal Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
Yes, young people like you have a chance. I'm 19 years old and bought my first rental this past year in Columbus OH by myself my parents are not on the loan and quite frankly didn't help me at ALL. Anyway, doesn't matter what some people think the markets going to do or not do. It also might not make sense for you to invest where you live in some cases and you might want to consider looking to invest out of state. Columbus OH is a perfect example of that lots of people have been moving towards investing out-of-state in Columbus because of the population growth and job opportunities.
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes5y
Originally posted by @Isaac Gwin:
Properties barely last a day or two on the market and I can't compete with cash buyers who go $100k over asking price. I maybe have $6k to my name right now, but no college debt which is a huge blessing.
If market deals don't work I'll have to go off market or just network with people and ask their opinions!
Bingo. Off-market. Build relationships with the owners in specific neighborhoods you like. By the time its on the MLS, it's too late.
RE is more than residential houses and condos. Keep an eye on commercial, office, retail, industrial, etc. Not all classes are in the stratosphere with tons of competition.
- Real Estate Agent · Grand Rapids, MI · Member since 2016 · 251 posts · 224 votes5y
Hey Isaac,
My best recommendation is to continue to read and consume real estate content. You can only control some things while other things will always be out of your control.
In the meantime, live below your means, save money, and prepare yourself to buy real estate in a couple years. If your market is prohibitively expensive, then you will have to look at other markets. Adaptability is definitely a key skill required for REI.
Best of luck!
- Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes5y
@Isaac Gwin I've been buying property for a long time, over the last many years I've averaged buying over 13 properties a year. One year I bought 39 properties. I've bought several properties this year, 2021 and have several properties under contract. I use about 20 different acquisition methods, MLS is one of them. When I did tally up the properties by the method MLS only accounted for 25% of the properties that I acquired. I'm friendly with a Turn Key provider, who told me they get 50% of their property off the MLS. (They also do extensive mailers and advertising campaigns). One of the properties that I recently acquired came from a letter. I do selective targeted letters, focusing on out of state, out of county, out of country, owners, as well as non-owner occupants and longtime owners, like 20 years+. I don't do farming per se, but have had 2 properties on one street with 22 houses, 4 houses on a street with 20 houses, and I bought 117 properties in one town with 1,300 houses. That's abut 9% of the town. I did no billboards or advertising, but when you have a presence, people know you and approach you about buying their property; and I sent multiple letter to the specific owners listed above, as the primary source.
- Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes5y
To be honest, there is never a great time to buy except for the past with the present being a close second.
You just need to think about how to reduce the risk. For example, I'm in a second house hack. If the market crashes and work isn't going well for me and my wife, we can rent out rooms in our main house while we rent out the ADU. Worst case I can sell and cash out.
Just think about how to reduce risk.
- Rental Property Investor · MI · Member since 2020 · 11 posts · 1 vote5y
@Isaac Gwin I totally feel your pain. I’ve been priced out of purchasing locally as the numbers aren’t even close to working so we’re looking elsewhere. Deals are harder to come by but they are out there for sure. Keep on looking!
- Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes5y
@Isaac Gwin I've been buying property for a long time, over the last many years I've averaged buying over 13 properties a year. One year I bought 39 properties. I've bought several properties this year, 2021 and have several properties under contract. I use about 20 different acquisition methods, MLS is one of them. When I did tally up the properties by the method MLS only accounted for 25% of the properties that I acquired. I'm friendly with a Turn Key provider, who told me they get 50% of their property off the MLS. (They also do extensive mailers and advertising campaigns). One of the properties that I recently acquired came from a letter. I do selective targeted letters, focusing on out of state, out of county, out of country, owners, as well as non-owner occupants and longtime owners, like 20 years+. I don't do farming per se, but have had 2 properties on one street with 22 houses, 4 houses on a street with 20 houses, and I bought 117 properties in one town with 1,300 houses. That's abut 9% of the town. I did no billboards or advertising, but when you have a presence, people know you and approach you about buying their property; and I sent multiple letter to the specific owners listed above, as the primary source.
- Real Estate Agent · Los Angeles, CA · Member since 2020 · 12 posts · 6 votes5y
I can understand the frustration. I've been looking for investment properties in Saint Louis for the past 6 months. With little inventory, investors are putting far less than ideal properties on the market and trying to push inflated prices. As a result, when good investment opportunities become available, the bidding wars that follow eradicates potential profits. I'm also a real estate agent in Southern California, and the market here is brutal for buyers as well.
- Investor · Chicago, IL · Member since 2020 · 50 posts · 32 votes5y
A few things come to mind here:
- First off, thank you for volunteering to serve our country. The SAs are a major commitment, and I applaud you for going that route. Stay safe and God bless.
- Just get comfortable with the fact that there is going to be a "correction" (however you are defining that term) and it's almost impossible to time. That's business cycle of capitalism. What a downturn looks like and when it occurs are very much open questions to which no one (and I mean no one) has concrete answers. The question investors are always asking themselves is, well, what does this deal look like if things really go sideways, both macro and micro. And am I prepared for it (to a reasonable extent)? Personally, I don't have a crystal ball, but I think the economy is going to roar here for the next 2 or 3 years. People are coming out of the COVID caves. You can see it and feel when you talk to people face-to-face. Consumers of all stripes are flush with cash and there is going to be confidence to spend. HNW folks have made big money over the last 12 months on a variety of investments. Middle class folks have brimming 401ks, a bunch of equity in the primary residence (and growing) and maybe some wage growth ahead as labor markets continue to tighten. And with an activist federal government pumping money directly into the economy, even the lower classes have some breathing room. Now, there are some things to watch. Tax changes might be a drag on growth to some extent. If one house of Congress changes hands, there may be some gridlock (although that might not be a bad thing). Inflation is here to some degree, so there is some interest rate risk. But the growth might be so strong that rates increases just get passed through in higher rents. And inflations constrains supply to some extent as well.
- You sound like you are in the classic spot of moving from the scarcity mindset to abundance mindset. I'm in the middle of that journey myself. Classically trained to see all the risks and downside in every deal so that's my default. What are all of the things that could go wrong? Why I shouldn't do something? I can't pull this off. I wish I could say I'm farther along this, but that would be a lie. Takes time and experience and the absolute comfort with the fact that I don't know everything, I am going to make mistakes (but jumping in anyway) and so I have to keep remaining teachable. And watching/hearing others get through those barriers as well.
- Rental Property Investor · Chesapeake Beach, MD · Member since 2020 · 16 posts · 6 votes5y
@Isaac Gwin
Every market is different! Every opinion is driven by the markets those opinions are experiencing.
Look at your market and look for opportunity! I firmly believe there is always opportunity, but sometimes it might be harder to spot if we hesitate to get in there! And getting in there doesn’t mean tying up Capitol.
- Investor · Hoffman Estates, IL · Member since 2014 · 434 posts · 185 votes5y
If you think prices are high now, just wait until tomorrow.
Don't try and time the market perfectly - NO ONE DOES. Buy and hold, and continue to buy until you die. It's kind of like dollar cost averaging into the real estate market.
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