To buy or not to buy? (First deal cold feet)

3 Replies

Hi everyone! Long time member, semi-first time poster. Here’s my situation: I was bitten by the real estate bug in my senior year of college (2-ish years ago) after reading Rich Dad Poor Dad. After a long time of reading, researching, and relocating (NYC -> Delaware), I’m one week out from closing on my first deal. The deal is a short sale, in a seemingly nice neighborhood, exactly one mile from The University of Delaware. My plan is to do a live in flip (Purchase price $172K, Reno $14K), and then rent out rooms to friends, roommates, etc. the property is basically move in ready, but the renovation (which would be almost all DIY) is an attempt to have the property appraise near top of market at $240K. All in all everything seems good, and going according to plan. The numbers work, nothing’s holding me back, but I keep feeling increasingly nervous. I’m still fairly young (25), and nobody else my age that I know is even talking about purchasing property yet. Does anyone have any feedback on when they purchased their first deal? Does everyone get these jitters around this time, or is it just me?

Yurly,

Welcome to REI. If you don't have jitters on your first deal, you are probably doing something wrong. Actually I think part of the reason folks do REI is for the rush of putting a deal together.

It's always difficult when you are doing something your peers and friends aren't. This is where a mentor comes in handy. 

IMHO the best thing you can do is just go over the numbers,  your plan, and your why again.  Keep those things in front of you,  keep checking for things you might miss and follow through.  

Your first deal won't be perfect,  but it gives you a baseline to start,  once you have your baseline,  then you can adjust as necessary from there. 

Hope that helps. 

Good luck, 

Jim 

Yuriy,just do it. There is a first time for everything. I bought my first house with zero research on numbers, market etc. after six months, 2008 arrived and I rented it. Lost money for couple of years. But everything went fine after. Just assume a 50% vacancy rate and keep that in cash. Remember the vacancy rate in 2008 was 11% or so nationally. You seem to have done more than sufficient research. Your age is the most important factor that is favoring you in this affair. I wish I was your age when I started or knew about what you know today. Good luck.

@Yuriy Kaunzinger , first of all, Congratulations on you pulling the trigger and buying at such a young age!

In over 15 years I've done over 550 deals for clients and in 18 years, I bought a lot of properties for myself. From my own and my client's experience, I will say that almost everyone gets the jitters! I personally ask myself everytime I buy or sell if I am doing the right thing and make sure I go through the price and reason why I buy or sell with someone that has done even more deals than me.

Buying and selling real estate is a highly emotional transaction, especially for you, which is your first purchase. The numbers that you are relating are fine, and I would say, talk it again through with your Realtor or a mentor and then move on with the purchase knowing all is normal. :)

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.