WANT TO START, Having Paralysis

[Quinell Dixon]

Hi all, Q here, and I must say I am overwhelmed. I read Rental Property Investing by Brandon a year ago and I’m reading it again to really try and understand. This RE stuff is something I’m so passionate about learning but feel there are so many moving parts and I just get stuck. I tried wholesaling (for like a week) and I didn’t cut it. So much to learn. I completely get the concepts but my follow through has not been pure. I own a business and I have been able to successfully bring in over 6 figures a year but I know the goods are in the ground. I am 36 now and I truly want something bigger for my legacy and my family. I’m hitting a wall and with all the drive and passion I have no direction. I have a wife and 3 boys and I want to really change our lives. I want to house hack but it seems like it would be hard with a family of 5. I truly get scared for our future if we don’t gain assets that can pay us with a buy and hold strategy but no clue what I’m doing. Hate to be a big baby, but I’m in need of just some direction. If RE isn’t for me, I get it but I want to give it a shot . For my family

[Mike Hern]

Quote from @Quinell Dixon:

Hi all, Q here, 

Hi Q,

I favor finding properties "Off Market" doing “Subject To” and selling on “Lease Option” for great cash flow. Such as:

Buy using Subject To and sell on Lease Option which I explain at https://www.biggerpockets.com/forums/311/topics/1141313-subject-to-why-you-need-money-to-buy-using-subject-to-subto-safely-legally

I've put together a spreadsheet that shows how all of this works. If you'd like a copy just DM me. Click to

https://www.biggerpockets.com/users/mikeh695 & Tap the message icon in the upper right corner of your screen

[Julie Belton]

I don't have any advice, but wanted to tell you that you are not alone.  i am closing this week on my first property, and I keep thinking of ways to get out of it even though I know its a good house, maybe not the best DEAL for my first, but at least I am getting a move in ready home. 

I too own a successful small business, but for some reason, buying investment property is much scarier!  Good Luck!

[Michael Blank]

Mindset is the number one thing that holds people back. It's also the number one thing that leads to success. 

Focus on your mindset. 

Sometimes, starting small is a good way to wrap your head around the concept and prove that you CAN do this.

An example in the MF space would be starting with a duplex first and then moving onto larger apartment buildings. It helps you realize that doing a larger deal isn't really that much harder. 

It sounds like you've already got your "WHY" ... your family. Keep focusing on your mindset and your reason why. You'll get to where you want to be before you know it. 

Lastly, getting support can help with being overwhelmed. There are lots of books, masterminds, mentors, and programs out there. Do your research and build your support system. 

[Adrian Lammersdorf-Scioll]

Whats holding you back?  I felt the same when I started 2 years ago, people were telling me im crazy for buying and that the market was gunna tank, and now I own 3 properties have significantly dropped my cost of living, and soon will be living free and collecting income.  House hacking is great, it's how I got my start, you can get a duplex with a 3/2 on both sides especially if your income is that good.  Theres a bunch of those here in Orlando.  Not sure how your kids feel about sharing a room, but I did with my brothers growing up until I was 10 so if they're young it should be fine.

[Quinell Dixon]

I know. I bought a property (my first) in 2021 and I am now seeing that I am getting the itch, but I have no way to know how I am suppose to proceed. I THINK I may try and convert my garage into a short term rental. Congrats on your first purchase. So good! 

Quote from @Julie Belton:

I don't have any advice, but wanted to tell you that you are not alone.  i am closing this week on my first property, and I keep thinking of ways to get out of it even though I know its a good house, maybe not the best DEAL for my first, but at least I am getting a move in ready home. 

I too own a successful small business, but for some reason, buying investment property is much scarier!  Good Luck!

[Quinell Dixon]

This is amazing advice my man. I really appreciate that. I have a property but now I think I want to house hack and convert my garage into a unit. That is a lower risk than buying another property and paying all of the associated expenses. Plus since I own this I can keep an eye on it, until I move ATLEAST. I want to leave Utah and go to Texas

@Michael Blank

[Quinell Dixon]

@Adrian Lammersdorf-Scioll that is a good idea. So, some transparency, I bought my first house in 2021 and now I have the itch to do something again. I think we want to try and covert our garage into a unit. The house is a small 3bd 2bth and the teenage has a room, we have a room, and the younger boys share. (10month old sleeps with us). We plan to move to Texas early next year. This can be a dual income generating property in a year. I just get scared to start a conversion I never have done lol 

[Julien Jeannot]

I find amongst my clients that paralysis is a common challenge that real estate investors, like any other type of investors, can face. It refers to a situation where an individual becomes overwhelmed by the abundance of information and options available, leading to an inability to make decisions or take action. Here are the top five reasons I’ve come across:

1. Information Overload: The real estate market is complex and constantly changing. Investors have access to a vast amount of information, including property values, market trends, financing options, Gurus, and more. Trying to process all this data can lead to paralysis as investors struggle to filter out what's relevant and make informed decisions.
2. Fear of Making Mistakes: Real estate investments often involve significant sums of money. The fear of making a wrong decision, buying a property with hidden issues, or missing out on a better opportunity can lead investors to second-guess themselves and delay making a decision.
3. Lack of Confidence: New or inexperienced investors may lack the confidence to assess properties accurately and evaluate potential risks. This lack of confidence can lead to overthinking and constant research without taking the plunge.
4. Perfectionism: Some investors set unrealistically high standards for their investments, aiming to find the "perfect" property or deal. This pursuit of perfection can lead to analysis paralysis, as it becomes challenging to find a property that meets all criteria.
5. Decision Fatigue: Analyzing properties, financing options, and market trends requires mental effort. Over time, this continuous decision-making process can lead to decision fatigue, where the ability to make sound judgments becomes compromised. As a result, investors might find themselves stuck in a cycle of over-analysis.

To overcome analysis paralysis, I advise real estate investors to take several steps:

• Set Clear Criteria: Define specific investment criteria and goals. This narrows down the options and helps investors focus on properties that align with their objectives. Keep it short and simple! You are not running a fund or a syndication.
• Create a Timeline: Establish a timeline for decision-making. Having a structured approach can prevent investors from endlessly researching and encourage them to take action within a reasonable timeframe.
• Seek Expert Advice: Consulting with experienced real estate professionals, such as agents, brokers, or mentors, can provide valuable insights and help investors feel more confident in their decisions. Find a trusted thought partner, forums can be helpful, but often lead back to issue #1.
• Start Small: If a large investment seems overwhelming, consider starting with a smaller property or investment. Gaining experience and confidence on a smaller scale can reduce the fear of making mistakes.
• Limit Research Time: Allocate a specific amount of time for research and analysis. This prevents information overload and forces investors to focus on the most critical aspects. Think the 80/20 rule.
• Practice Decision-Making: Making decisions is a skill that can be practiced and refined. Start with smaller decisions and work up to larger ones to build confidence in your judgment.

Remember that while thorough research is important, there comes a point where taking action is crucial for progress. Balancing analysis with action is key to successful real estate investing.

[Adrian Lammersdorf-Scioll]

Sounds you have the plan, just find the right team to help you, and move in on it.  House hacking is fail proof because at the end of the day you can always cover the cost of living even with a vacancy for the most part.  It does take time to find a good deal though so just be patient.  With interest rates set to rise 2 more times, more opportunities will come.  I paid a 20k appraisal gap on my first property when interest rates were below 4%, my next properties appraisal came in above what I offered on it, and thats when interest rates were between 6-7%.  Learn how to do comps as well, a good agent will guide you on how to do it, and be patient with you.  Best of luck, you got this!

[Carl Davis]

Sounds like you already know what you want, you just need some validation from someone that’s done it.

I’ve house hacked 3 times now in Utah, all over the wasatch front. I’m coming out with a free ebook to help people like you navigate the house hacking strategy.

Dm me if you want more info

[Benjamin Aaker]

Hi Q,

Thanks for your great question. Since you are willing to house hack, you might consider purchasing a 4 plex. You can get a FHA loan for this and come in with low money down. If you can also keep your current house and rent it out, even better. If you don't have the finances, then sell that one.

I recommend you start with one purchase and work slowly from there. Don't expect to have that retirement nest egg right away. Build equity over time and try to maximize it over cash flow.

[Dave Skow]

@Quinell Dixon- thanks - undestandable ...assuming you  would need a loan to buy - get a free formal pre approval in place using a hypotehtical  price  and loan amt ...this will force you to get   organized / educated and  prepared  and this should also stinulate your next steps  

[Chris John]

Numbers work = buy 

Numbers don't work = don't buy 

Don't overthink it and let the deal (not the property) speak for itself

[Sandra Morrison]

@Julie Belton

My 22 yo old daughter just bought her first house and was freaking out. I still freak out every time. every time. It is more of a questioning now, but definitely every single time.

Best advice is to keep moving forward, take action and find your RE tribe in your area or wherever you can get support.

[Nick Bolding]

@Quinell Dixon

We have all been there at some point in terms of analysis paralysis.

I highly recommend finding a market. Identify your cash flow and work with a local agent that is an investor themselves and has access to off market deals, contractors, PM, etc.

[Quinell Dixon]

All amazing advice. WOW! I think after digging through the forums a bit I had a lightbulb moment. I believe I want to house back my garage and convert it into an ADU. That will definitely take time and money, and I think I will use my HELOC out of my first home to build the ADU and short term or long term rent it. I want to do research. You guys are all amazing!!

[Logan M.]

@Quinell Dixon, let's meet up for lunch.

People overcomplicate real estate. This hit me when I met an investor with a lot of real estate with no formal education and even after becoming a multimillionaire, he is still grinding.

[Leo Ray]

@Quinell Dixon I see you're interested in REI, and you're in Salt Lake City; I have plenty of experience investing in the SLC market.

Here's my suggestion: start with the easiest, simplest REI strategy--which is house hacking (I don't count buying shares in REITs as "real" real estate investing, since it doesn't involve owning or operating an actual property).

House hacking is likely the BEST strategy for beginners. You will gain invaluable experience through house hacking that you can later apply to other, more complex REI strategies, if you so choose.

Educate yourself on the many ways house hacking can make you money (e.g.; cashflow, lowering your living costs, tax benefits, mortgage paydown, appreciation) --the topic has been discussed thoroughly in the forums, in books/articles and in youtube videos.

With the family, you'll probably want to house hack a multi fam property (duplex, tri or quad). Is it less enjoyable to live in a multifam property than your own house? Yes. Is it a pain to move your family into a new property? Yes. But, no pain, no gain--I don't know a single successful RE investor who didn't make some serious sacrifices along the way. Years from now, when you own a $50 million portfolio and you're living in the best house in your city, you'll remember your househacking days fondly, and you'll be glad you took that bull by the horns.

Like many investors, I cut my teeth on househacking--and it prepared me to eventually move into larger, more complex real estate investments. The most important lessons I learned while house hacking are not lessons one can easily learn from books or courses--they can only be learned via experience and hard knocks. In particular, I learned a LOT about property analysis, acquisition and management--which is critical to understand (even for investors who have property managers).

Today, a lot of my portfolio is handled by PMs, but my own experience with PM has been essential for me to successfully manage my PMs (PMs are definitely NOT a "set it and forget it" type of employee--they need oversight, which requires experience. Managing a team of PMs with no PM experience is a bit like trying to manage a law firm with no legal experience, or trying to manage an auto shop with no mechanical experience)

So, if you want to be a legit real estate investor and build up a significant portfolio, you need to get experience with property analysis, acquisition, and PM--and house hacking is one of the best, quickest ways to get that experience (while also making money).  My portfolio these days is multi-faceted, and I've done all sorts of REI strategies other than house hacking, but most of my success can be traced back to the experience I gained while house hacking, and a lot of my best returns were via househacks...often, the simplest strategy is the best.

Good luck out there!

[Scott Phillip]

Hi Q. I've reinvented myself professionally three times over the past two decades. Like you, I'm looking to do it again with real estate. The three things I did each time to achieve success were pretty simple and something I could control:

1. Fake it until you make it.

2. Accept the fact that you will make errors but learn from your mistakes.

2. Work harder than the next guy.

Good luck. You got this!

Scott

[Quinell Dixon]

@Logan M. it is awesome that you are in Utah as well. Would love to meet and chat about RE. I truly appreciate you. 

[Quinell Dixon]

@Scott Phillip this is really encouraging. I’ve built my identity and my business but I realize that even owning my own business I’m still responsible for everything that goes on. Real estate is interesting to me because you can build teams of people around your assets. Everyone wins, and you gain knowledge and understanding, and, the ability to change that only your life, but your families lives as well. 

[Quinell Dixon]

@Leo Ray my man. This was so well put together and I completely see what you mean and the knowledge you bring. I would love to pick your brain further more. I have a house hack opportunity and I agree that it the best, safest, and most practical way to start. How can I contact you more?

[Doug Quist]

Quote from @Quinell Dixon:

All amazing advice. WOW! I think after digging through the forums a bit I had a lightbulb moment. I believe I want to house back my garage and convert it into an ADU. That will definitely take time and money, and I think I will use my HELOC out of my first home to build the ADU and short term or long term rent it. I want to do research. You guys are all amazing!!

With respect to the ADU, check on your zoning to be sure you can do that. Some cities are pretty anti-ADU at this point. I am thinking about building a large woodworking shop and Sandy City kept emphasizing that "you can't have anyone sleeping in it". I think they said it about 8 times. :-)

[Doug Quist]

Quote from @Logan M.:

@Quinell Dixon, let's meet up for lunch.

People overcomplicate real estate. This hit me when I met an investor with a lot of real estate with no formal education and even after becoming a multimillionaire, he is still grinding.

 @Quinell Dixon and @Leo Ray, I eat lunch every day and I'd be happy to join y'all for lunch.  I live in Sandy and meet my Utah Valley friends near Slapsgivingpoint at JCW, Five Guys, Spitz, etc.

I don't house hack because SWMBO isn't that interested, but my daughter does in her Vineyard condo and another daugher is going to start in her St George townhouse, so I know a bit about it.  I'm mostly a LTR dude with fourplexes, duplexes and a house in Utah and SLC counties and one being built in Phoenix and two in Ogden.  Lunch sounds fun!

[Logan M.]

Quote from @Doug Quist:

Quote from @Quinell Dixon:

All amazing advice. WOW! I think after digging through the forums a bit I had a lightbulb moment. I believe I want to house back my garage and convert it into an ADU. That will definitely take time and money, and I think I will use my HELOC out of my first home to build the ADU and short term or long term rent it. I want to do research. You guys are all amazing!!

With respect to the ADU, check on your zoning to be sure you can do that. Some cities are pretty anti-ADU at this point. I am thinking about building a large woodworking shop and Sandy City kept emphasizing that "you can't have anyone sleeping in it". I think they said it about 8 times. :-)

ADU laws are changing in Utah all the time:

H.B. 82, sponsored by Representative Raymond Ward, addresses this issue and helps alleviate the problems caused by the housing crisis.

The bill prohibits local and state governments from establishing accessory dwelling unit restrictions regarding things like the size of the unit, the size of the lot, parking, and street frontage. So long as accessory dwelling units comply with the applicable building codes and fire codes, they should be allowed.