I’ve educated myself. I’ve watched countless hours of YouTube videos and listened to the same amount of podcasts. I just finished a webinar course and I’m ready to take the dive. I’m so used to the rat race that I have an underlying fear of creating so much debt that I won’t be able to recover. what if I can’t resell? What happens when I can’t find tenants? Everyone makes it sound so easy and so lucrative but I can’t help with the “what-if’s”. Anyone else have these same thoughts in their beginning ?
Real Estate Agent · Pittsburgh, PA · Member since 2019 · 22 posts · 11 votes
4y
You're suffering from "analysis paralysis". You need to make sure the numbers work and go for it... or find a mentor/partner who will walk you through it. You got this!
Rental Property Investor · San Francisco, CA · Member since 2015 · 18 posts · 31 votes
4y
I take the perspective that if something scares you, you need to first understand why. If your fear is legitimate, listen to it. We fear harm to our children, to our persons, etc etc. Parents fear sending their children to war, and with good reason. We fear dangerous situations that threaten our lives or physical well-being, etc. We are well evolved to fear these scenarios because our primary concern is survival, and survival of our offspring.
Fear in the context of investing does not (usually) rise to this level of risk. Your mind, though, wants to equate the two. Fear of being eaten by a wild beast = fear of losing money, in this context. So first off, identify the fear. It sounds like your fears fall into the realm of the "unknown". How will I find a new tenant? These things can be moved past quickly because while they are unknown, they are not inherently "dangerous".
Here's what I would say. If you have a sound investment thesis, you are not buying in a "dying" city (generally not the case), you are being conservative with your underwriting and your investment cash-flows on actual rent agreements in place, then any fear you have is based around the fear of the unknown and you need to just move forward. Things will go wrong. There's no question. Have reserves in the bank.
If you have reserves, then, recognize that your fear is trying to masquerade as something really dangerous that it is NOT. Do your first deal, and when your first deal is done you'll realize that it wasn't actually that crazy. The unknown moves into the realm of the known, and those things you feared fade away because they were never really worth fearing. I had a buddy who was a former military guy who once said to me - if I am afraid to do something, I immediately do it. All good things lie on the other side of fear. That's generally true, I have found.
This being said, if you are trying to undertake a highly speculative investment that has no chance of cash-flowing in the near future, and it requires all of your money to do it - then I'd say your 'fear" is well-founded. That has the potential to spiral out of control and be bad for you.
“I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain.”
I’ve educated myself. I’ve watched countless hours of YouTube videos and listened to the same amount of podcasts. I just finished a webinar course and I’m ready to take the dive. I’m so used to the rat race that I have an underlying fear of creating so much debt that I won’t be able to recover. what if I can’t resell? What happens when I can’t find tenants? Everyone makes it sound so easy and so lucrative but I can’t help with the “what-if’s”. Anyone else have these same thoughts in their beginning ?
Action, you can never be 100% sure, unless you want to be too late that is. Once you're at 60-70% sure take action, the other 30-40% is where the entrepreneurial mindset of solving problems on the fly comes in.
New to Real Estate · Lakewood, CA · Member since 2021 · 26 posts · 8 votes
4y
@Nathan Leger
Have some more experienced investors look over your numbers to affirm that you’re making a good decision. Also recommend house hacking. Bunch of great advice above!
Raleigh, NC · Member since 2020 · 3 posts · 11 votes
4y
@Nathan Leger
What might be a good idea is partnering with someone. Assuming you have capital, having a partner who has a good amount of properties most likely already knows how to find tenants, manage, etc. It would definitely help with thinking you are all alone in doing it. Someone with around 10 units would probably be a good number, because they are big enough to know what to do, but probably small enough so it’s worth their time. Just FYI, I haven’t gotten my first property yet, but thought it was a good option! Good luck!!
Investor · Northbrook, IL · Member since 2017 · 352 posts · 295 votes
4y
@Nathan Leger - What I have to offer regarding this topic, goes beyond your immediate question. It will apply to so many other questions that you, I and others go through on a daily basis. If you take the type to learn this tool, it will help you in so many other areas of your business.
The concept or tool was developed by 4th century monks. The fact that it remains relevent today, demonstrates the power in their tool. It is not some wacky hockus pokus type stuff. In fact, many others have tried to rebrand it under new names or terminology. The idea is everyone, and literally everyone, is one of 9 personality types. None of them are good or bad, they just reflect our "natural" ways in which we respond to both good and challenging situations. When we are "healthy" we draw from one set of traits. When we are "not so healthy", we pull from others in an ugly manner. We all have this, in fact they are developed or born from trama. It is our natural self coping mechanicism. The system or tool is called the Enneagram.
Ian Morgan Krohn (no relation - so BP I am not promoting anything) has written a concise book about the enneagram and developed a test to help each reader to determine their type. The book is called, The Road Back to You.
So to answer your question, "how do I overcome fear", is impossible to answer unless one understands your type. There are 9 types: 1 - 9. The answer changes for each type. What someone offers in this post because that is how they did it, could be 100% meaningless to your your type. A type 1 is a Perfectionist. The basis fear is failure. A type 5 is an Intellect. The basic fear is looking stupid based upon a decision with incomplete information. For instance, @Robert Beardsley answer for a type 3 is too simplistic (nothing against what Robert post - I am not criticizing his post. For his type, the answer works!) For a type 3, the response is, "What about X, or Y or Z - there is so much more to consider!". A type 3 is an Achiever, appearing to be successful. Basic fear is being worthless - if it fails then I am worthless. They each have very different set of fears which drive them. I hope and trust you can begin to see my point. Based upon your post, I have no idea your type or which is the best answer for you.
I would offer, read the book, and determine which type resonates most with you. There are hundreds of books on this subject, if that one doesn't resonate with you. Nevertheless, only you can determine your type, no one could or should tell you what you are. Then you will begin to determine how to answer your question.
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