What is the biggest hesitancy with investing?

Question

I've noticed a lot of investors will pass on a deal they want strictly because their "numbers don't work." When you ask them rehab cost, ARV, etc., they don't really seem to have any response.

Would love to hear about the real hesitancy behind pursing an investment.

Jimmy Lieu · Answer

So glad you posted this! I think a lot of the time "the numbers don't work" is just shorthand for "I don't have enough confidence in my assumptions." If you're unsure about rehab costs, ARV, rents, or the exit strategy, it's a lot easier to walk away than risk making an expensive mistake. Early on, I passed on a few deals simply because I didn't trust my underwriting yet, not because they were actually bad deals. Experience helps, but so does reviewing a lot of deals and comparing your estimates to what actually happens after closing. At the end of the day, I'd rather pass on a good deal than force a bad one because I was overly optimistic with my numbers. Happy to connect and answer any questions you have!

John Morgan · Answer

I bought my first rental 11 years ago and did absolutely zero due diligence or research. No regrets! I now have 39 properties and glad I made my first random offer that got accepted. I had a few beers and emailed the listing agent my 130k cash offer to close in 2 weeks. I only had 25k in savings and was making 40k/year. The seller accepted it and I had to figure out how to come with 130k in only two weeks!

So my advice is to just go for it, and don't over analyze. RE investing isn't rocket science. Trust me. Anyone can do it.

Janice Carter · Answer

@Ellison Frick In many cases, I think it is analysis paralysis or fear of making an expensive mistake. Some investors also underestimate repair costs or overestimate ARV, so instead of taking a calculated risk, they simply pass on the opportunity.