Hi guys, I'm a new investor from California looking to buy rental properties out of state but I've recently noticed that I've been starting to psych myself out the closer and closer I get to buying my first rental property. I've been studying Real Estate for about 4 years now and feel that I am ready as I'll ever be to purchase my first property. Lately though I've been questioning myself if I should wait until it becomes more of a "buyers market".. I know there is never going to be a perfect time to jump into real estate but sue to rising interest rates along with other factors history shows another market correction expected to happen within the few years. I'm not sure if I'm getting in my own head or if I'm overthinking things. Any advice would be greatly appreciated!
This post would be a lot different if you purchased a property four years ago. If you have your financial house in order and have done your due diligence, make a move. Don't let eight years of studying happen while waiting for the next correction.
Don't have analysis paralysis, find someone who's local to the market where you want to invest and is already successful. Reach out to them about assisting you in locating deals. Most of those who are very successful, will have more deals then they can buy themselves, and will have good deals available to wholesale to other investors who contact. Make sure there's Property Managers available wherever you invest, that's not always a given. Once you establish a local contact to assist you, and they send you some potential deals you're interested in, take a trip to see for yourself before buying. There are dishonest people who will dump their crap on you. Once you visit the properties, you'll be able to make an educated decision, and hopefully will have established local contacts to work with on going and not have to travel there each time.
Well the first thing I would ask is-- what are the fundamentals (mostly numbers, but general property fundamentals) involved with the rental property you are looking at or the general ones you are looking at? Like where exactly will the profit on it/them come from? I know it probably sounds like a weird question but if you know exactly how you will profit on a property, you will be able to let go of a lot of the fears. A lot of times people dive into something not understanding exactly what they are diving into and that of course can be some crazy fears in. Not saying you don't know what you are getting into, but how much do you know of what you are getting into? The more knowledge, the less fear.
After that, I always like to ponder the absolute worst-case scenario. When I do that, I typically find it's not as intimidating as my fears may have believed it to be.
Lastly, if you always wait for a buyer's market, you could end up waiting a long time. We never totally know when it will happen.
It's all about what you buy during each "market" as to whether it's worth doing during that time or not.
Throughout my 30 some year run as a real estate investor I have found that if you plan a steady but sure way to start and then grow your business will pay off in the end. In other word do not start by over extending yourself to the last dollar you can possibly spare. start small, get some experience, allow yourself to learn and then take the next step up. If you expect the market to take a turn then adjust yourself to the market that can withstand a market move downward but still provide you a positive cash flow. Don't start out shooting for the stars in a manner in which you lose a coupld of hundred dollars per month income its going to put you in a difficult financial position.
It really does not matter what you invest in. What I have found is that if you set yourself up to withstand market movements then you will always be able to progress. If the market is high then buy a little lower and if the market is low then you will be ok if it moves higher just as long as you are not overly optomistic and depend on the markets movement to get you into profitability because even if that were to happen that can be short lived.
First i make sure that whatever I do I am starting out profitably and then I avaluate or check out my feelers for what the market sentiment is and any evidence of a market direction so that if the market moves in any direction I can either withstand it or take advantage of it if possible.
The longer you are in real estate and the more assets under your control then you can be flexible and diversified. The name of the game is to win overall not necessarily every single time and in every single instance.