What is your biggest problem you face right now as a REI?

Rental Property Investor · Denver, CO · Member since 2018 · 183 posts · 172 votes

Hello Bigger Pockets Community:)

What's everyone's biggest frustration/problem you face right now as a real estate investor?

For myself, it would be deal flow. My partners and I will look at 100 deals and about 5-8 of those will fit our invest criteria. The more deals we have to analyze the better.

I'd love to hear your answer.

My biggest problem I face right now as a REI is..............

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Nathan GesnerBusiness Member

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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

Funds to purchase. I can find deals regularly, even in my difficult market. But getting the funds together takes time because I'm not willing to over-leverage and borrow my way to success.

The truth is, I could sacrifice more of my personal time or family and work more to get the funds. However, my family is more important to me than an accelerated business plan.

We can't have everything.

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Matthew Perry
Developer · Boston, MA · Member since 2017 · 125 posts · 137 votes
7y
Right now it is finding value add-on proposition properties. Here in the Northeast there has been such a compression in the marketplace and the competition for properties is so high people are willing to settle to just to have a project on the books. On on the hand it is a great problem to have when we are wholesaling a property there is a ready made list of buyers, but then when trying to find bigger projects we are looking at properties with maybe ten others. I'd also add the political climate as well, because there are so many uncertainties when looking at a project to say what is the zoning component that needs to be managed, and what is going to happen with the political headwinds- not just with rates but also with the cost of materials going up. The cost of raw materials has forced us to increase our construction budgets across the board.
0 Reply
Michael Ablan
Real Estate Broker · Watertown, NY · Member since 2016 · 1k+ posts · 1k+ votes
7y
My biggest problem is deciding if making the step into Syndication is the right move for our business. Doing so will expand our portfolio, but will create much more work for us for significantly less money. We could make more money tackling smaller units with our own cash, however, we would be forgoing the experience that goes with bringing together investors to tackle a larger deal. Ultimately it comes down to my goals, but my thoughts on the best way to achieve them seems to change daily.......Worse problems to have though, so I should probably stop my belly aching :P
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James MasottiPro Member
Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
7y
Originally posted by @Steve Vaughan:

Convincing the 5 specific old vet landlords I've built relationships with over the years to get off the fence and sell. No rush, really, just hope they don't all decide to retire at the same time. That'd be 48 units!
In this business I've found that deals come in waves, like @jd Martin described. Tons of deals one year, then a desert full of crickets. My goal would be 3 a year and I'd get 19, (then go 3 years without). Just keep the relationships up, add value, continue networking, etc.
The years that turned out massive, I had to get creative and was glad I was able to match seller financing or MLOs to sellers it was a fit for. Then I was still prepared for bank or commercial financing when needed.
For those of you with more deals than money, Id suggest you make that hay while the sun is shining. Some years are rainy or drought-filled. Get creative within your own comfort limits.
Steve Vaughn always down to drop some knowledge!
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2 Reply
Ben G.
Rental Property Investor · Will County, IL · Member since 2018 · 39 posts · 11 votes
7y
Not enough cash to invest at the moment.
0 Reply
Krishnan T.
Real Estate Professional · Tampa, FL · Member since 2017 · 104 posts · 47 votes
7y
@Jeff Licciardi R.E. investing is supposed to be a almost scientific type of investing where the investor has the ability to control every aspect of the investment ; unlike investing in Stocks or Bonds where the investor has little of no control over how companies functions etc. But that is far from the truth because this is not liquid , and you cant control the lending rates/closing costs, contractors , inspection etc. And the various REI "experts" all disagree with each other on what type of investment works. They say , "it depends" ,but are never shy to dismiss a method of investing. Buy and Hold investors diss flippers,whole sellers ; sydicators diss SFH investors; SFH investors diss MFH investors ..and note investors diss holding physical investing , individual investors diss Turn key, investors vastly disagree on what price,what area you should be in, neighborhood you should be in , how long you hold, investor in state or out of state. And in all this , Real estate investing is EXPENSIVE , its not cheap...so you take this massive risk on a non liquid investment that if it goes wrong ,you cant easily get out of. The people who are already set and made money in R.E.I are simply selling real estate to the wanna be or soon to be and making them believe that they can make it too
2 Reply
Myron Petties
Rental Property Investor · Madison, WI · Member since 2018 · 3 posts · 0 votes
7y
@Matthew Baltzell
0 Reply
Jarrod Kohl
Boston, MA · Member since 2017 · 209 posts · 126 votes
7y
Originally posted by @Michael Kiley:

Originally posted by @Tim G.:
I'm really bored and I don't feel challenged professionally. Not sure if this means I need to move into another asset class or do something different. Money isn't a motivator like it used to be. I need a creative outlet and way to give more purpose to my work.
I've been fortunate to spend the majority of my time doing meaningful work with quality people. Every day I get to use my hands and create something beautiful that's tangible and purposeful rehabbing houses. I've rehabbed homes all over Cleveland almost exclusively by myself and someone I enjoy company with. It's a good life, a rewarding one...but here's my "problem" I listen to what other successful investors have to say about creating a passive income by developing systems and hiring teams to do all their work (deal finders, contractors, brokers, property managers...) I know this makes financial sense and it's smart...but at the end of the day, I don't find it satisfying. My problem is that as much as I would like to enjoy the fruits of a scalable business, creating one is as exciting as filing my tax return. So in conclusion, I think that happiness must lie in the balance. I feel that we all need an outlet for our creativity and if we don't allow it, life gets boring and we lack purpose.
Maybe the key is starting small. So instead of creating a big company, just find a contractor that you like so that you can start doing two deals instead of one, or at the very least you could finish things faster and scale that way.
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Jarrod Kohl
Boston, MA · Member since 2017 · 209 posts · 126 votes
7y
Originally posted by @Krishnan T.:

@Jeff Licciardi R.E. investing is supposed to be a almost scientific type of investing where the investor has the ability to control every aspect of the investment ; unlike investing in Stocks or Bonds where the investor has little of no control over how companies functions etc. But that is far from the truth because this is not liquid , and you cant control the lending rates/closing costs, contractors , inspection etc. And the various REI "experts" all disagree with each other on what type of investment works. They say , "it depends" ,but are never shy to dismiss a method of investing. Buy and Hold investors diss flippers,whole sellers ; sydicators diss SFH investors; SFH investors diss MFH investors ..and note investors diss holding physical investing , individual investors diss Turn key, investors vastly disagree on what price,what area you should be in, neighborhood you should be in , how long you hold, investor in state or out of state. And in all this , Real estate investing is EXPENSIVE , its not cheap...so you take this massive risk on a non liquid investment that if it goes wrong ,you cant easily get out of. The people who are already set and made money in R.E.I are simply selling real estate to the wanna be or soon to be and making them believe that they can make it too
REI and Stock investements can be very similar. Think of it this way, some people buy and hold (with all kinds of variations) this has worked well in both Stocks and in RE if you have a well spread portfolio and hold long enough you will almost always make money. But it might take 20 years. So many people want something faster, which is fine, but it also has a lot more risk. Again this is true in REI or Stocks. In the end you try to find something that you are comfortable with and really deep dive into that, spreading your type of investments all over the board is tough. Lastly, it seems easy to have less money to "play" with stocks, but in reality you are not likely to make much without putting much into the market.
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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
7y
@Jeff Licciardi No, I do not use partners. It's just a personal choice because I feel partnerships complicate things. I have some great friends that are investors and they would probably partner with me but I'd rather just keep the friendship a friendship.
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2 Reply
Leo Gomez
Bronx, NY · Member since 2016 · 20 posts · 1 vote
7y
Finding a way in. Ideally I would like to work for someone birddoging, every REI meeting I’ve attended requires I pay to play, right now that’s not possible for me.
0 Reply
James MasottiPro Member
Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
7y
Originally posted by @Leo Gomez:
Finding a way in. Ideally I would like to work for someone birddoging, every REI meeting I’ve attended requires I pay to play, right now that’s not possible for me.
If you're saying it charges a nominal admission fee that is probably needed to pay the venue that's to be expected. If you're referring to an event asking you to pay hundreds or thousands of dollars than more than likely those aren't REI meetings, they are guru sales pitches, and should be avoided. Get connected with @Darren Sager he runs a top notch meetup in the metro NY area.
Podcast Guest on Show #312
1 Reply
Denise Roman
Accountant · Santa Fe Springs, CA · Member since 2018 · 8 posts · 1 vote
7y
@Matthew Baltzell my biggest frustration is where to go to fInd a lender who gives loans to brand new LLC. Using funds borrowed from QRP/solo 401k plan. Any suggestions?
1 Reply
John T. urbik
Financial Advisor · Gilbert, AZ · Member since 2018 · 3 posts · 0 votes
7y
@Nathan G. If you have qualified funds (IRA, etc) , you have the funds! I am not referring to a self directed IRA. You don’t subject yourself to predatory lenders.... You self finance. The set up is crucial. It’s legal. It works!Ideally, you want an investment property that you plan to keep 8-10 years, but that is not required.
0 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
7y
Originally posted by @Matthew Baltzell:

Hello Bigger Pockets Community:)
What's everyone's biggest frustration/problem you face right now as a real estate investor?
For myself, it would be deal flow. My partners and I will look at 100 deals and about 5-8 of those will fit our invest criteria. The more deals we have to analyze the better.
I'd love to hear your answer.
My biggest problem I face right now as a REI is..............
My biggest problem I face right now is staffing my construction company. We do a decent volume $2M+/year. However keeping the thing staffed with quality people can be challenging. The construction industry in my market (Cleveland) has got to be one of the most labor shorted industries around. The non unionized trade workforce is riddled with a lot of drug usage, felons and things of that nature. Attracting, keeping & retaining top level talent is never easy.
1 Reply
Lucia Rushton
Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes
7y
@Alex Franks I would take your “problem” any day :)
0 Reply
Amy Leonard
Rental Property Investor · PA · Member since 2018 · 29 posts · 25 votes
7y
My biggest REI issue is time. I work 50-60 hours a week at my "9-5", have 4 kids that all play sports, a 5300 sq ft house on 3 acres to maintain, 4 sfh's that I manage and repair, and a commercial property with multiple leases. Acquired the 4 properties in this last year. This investor is exhausted. Lol
0 Reply
Jasmyne M.
Investor · Monroe , LA · Member since 2016 · 28 posts · 16 votes
7y
@Nathan G. Same problem... Let me know when you come up with a solution. Lol
1 Reply
Gabrielle Martin
Rental Property Investor · Los Angeles, CA · Member since 2015 · 73 posts · 55 votes
7y
Dealing with two evictions on the same property these past two months. Negative cashflow until Occupied again. Certainly hurting my wallet. Should be good by December.
Also, finding capital for more deals has been a struggle.
0 Reply
Daniel Murff
Real Estate Agent · Homewood, IL · Member since 2018 · 2 posts · 0 votes
7y
@John Casmon Hey John, what would you consider a value added deal in Chicago? Still building knowledge and curious to what that looks like? Thanks.
0 Reply
Randy Gillon
Auburn, AL · Member since 2018 · 17 posts · 3 votes
7y
@Kate J. How do you define a deal? What’s your criteria? Thanks
0 Reply
Alex Franks
Rock Hill, SC · Member since 2015 · 1k+ posts · 597 votes
7y
@nathan G
Really good post ..I walked away from a company that had large contracts to build quite a bit of turn key rentals in multiple states. I was traveling and speaking in multiple states and countries. Then I realized I truly was not happy. Did not agree with the numbers. The biggest thing was I wanted to be home more for my wife and family. I wanted time in my garden. So I downsized and basically started over. I still have some great partners ( lenders) and a few new ones. ) To me personal time and making sure things make sense for me this time around. Spending time with my wife and a lot of my nieces and nephews, mom and dad and mother in law and father in law. Feel in a much better place when I stopped chasing money and deals. Now deals seem to find me as well as capital when needed.
Alex

inOriginally posted by @Nathan Gesner:

Funds to purchase. I can find deals regularly, even in my difficult market. But getting the funds together takes time because I'm not willing to over-leverage and borrow my way to success.
The truth is, I could sacrifice more of my personal time or family and work more to get the funds. However, my family is more important to me than an accelerated business plan.
We can't have everything.
0 Reply
James MasottiPro Member
Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
7y
Originally posted by @James Wise:

Originally posted by @Matthew Baltzell:
Hello Bigger Pockets Community:)
What's everyone's biggest frustration/problem you face right now as a real estate investor?
For myself, it would be deal flow. My partners and I will look at 100 deals and about 5-8 of those will fit our invest criteria. The more deals we have to analyze the better.
I'd love to hear your answer.
My biggest problem I face right now as a REI is..............
My biggest problem I face right now is staffing my construction company. We do a decent volume $2M+/year. However keeping the thing staffed with quality people can be challenging. The construction industry in my market (Cleveland) has got to be one of the most labor shorted industries around. The non unionized trade workforce is riddled with a lot of drug usage, felons and things of that nature. Attracting, keeping & retaining top level talent is never easy.
Let me know when you figure this out and write a blog post about how you did it :-)
Podcast Guest on Show #312
0 Reply
Kay Fakunle
Investor · Sejong Daero, Seoul · Member since 2016 · 25 posts · 5 votes
7y
2 major issues for me. 1. Skilled Contractors that are RELIABLE 2. Quality Property management
0 Reply
James MasottiPro Member
Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
7y
Originally posted by @Denise Roman:
@Matthew Baltzell my biggest frustration is where to go to fInd a lender who gives loans to brand new LLC. Using funds borrowed from QRP/solo 401k plan. Any suggestions?
Check out this blog post by @Dmitriy Fomichenko. He has several non-recourse lenders who work with SDIRA/Solo 401k plans
https://www.biggerpockets.com/blogs/2810/50272-list-of-non-recourse-lenders-for-self-directged-ira-and-401k
Podcast Guest on Show #312
0 Reply
Alex Franks
Rock Hill, SC · Member since 2015 · 1k+ posts · 597 votes
7y
Alex
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