Good Day Biggerpocket Family, I'm relatively new and was looking to start 2015 out with a bang. I've been out of real estate actively for about 5 years, but very eager to get back. My last endeavor as an investor ended with me getting burned in a major condo deal in Washington, DC. To fund the deal, I used a hard money lender and 2 of my rental properties as collateral assignment to secure the funding. It worked well on my first project, but the cost of the money was too expensive and I didn't really make a profit (rookie mistake on my part for being too eager and accepting what I could get in order to do the deal.) On my second project using the same formula, the results were even worse. My contractor got into an argument with the neighborhood ANC, who pushed to get a stop work order on my project. Long story short, I got behind on the schedule, which really hurt me since I was making "large" interest only payments.
I was forced to file for a bankruptcy to protect my assets as the hard money lenders came after me. Needless to say, this experience soured me on participating in real estate investing, but I've never lost the love for the business of real estate.
After years of maturing and learning on the sidelines, I'm really ready to get back! As a father raising a young son, I want to be able to provide the financial security that my family needs and I know that real estate is a great avenue for that.
I'd love to hear from all the savvy investors in this forum for suggestions on the best ways to restart my investing career!
@Chad Clinton Welcome to Bp, many of us have had bad experiences. I once had someone tell me I got in a bad car wreck once but I still drive to work everyday. I view life to be just that. There are so many ways of making money in real estate. I wish you the best and If I can help let me know. Congrats on not giving up and blessing in 2015. There are tons of information so search around on BP
Wow, I'm sorry for the hard lessons, but congrats on getting back on the horse! My kids are my inspiration too! I don't know your situation, but I've found that investing in this area is tough! Prices are so high and rents just aren't high enough to make buy and hold investing worth it. Like you've seen, the prices also make mistakes hurt! So I'm no expert, but I've found that investing out of state has been an excellent way to get started with lower risk, lower investments, and higher returns! Just a thought. However you get back into the game, I wish you all the best!
@Chad Clinton , sorry to hear about your struggles so far.
Here's my advice:
1) Decide what kind of real estate investing you want to participate in. There are so many ways to make money in real estate and each of them have countless niches that you can specialize in. I really think that truly achieving long term success begins and ends with finding what you enjoy doing and getting great at it.
2) Find a mentor or someone you trust that is either smarter than you or knows more about the niche that you are interested in and do whatever you can to learn from them.
3) Never stop learning. There is so much content on the forums that you could spend months reading and not scratch the surface. Pick up a few of the business/real estate books recommended on the podcasts and also listen to the podcasts themselves. Having access to the successes and failures of 100+ successful real estate investors is an invaluable resource and the podcasts really have some fantastic content on them.
I hope this helped a little! Good luck.
not knowing too much of your background -
1. See where your credit score is. credit.com creditsesame.com credikarma.com. Never heard of anyone having too high a credit score being a problem.
2. Work to free up cash flow - reduce cell phone plans/cable plans/car loans - etc. Any monthly bills.
3. Talk to a good banker to see what you would need to do to owner occupy a duplex/triplex etc. or if a banker would finance you for larger Real Estate Deals.
IMO eliminating ie can or cannot get a owner occupied loan - ie can or cannot get an investment loan. Process of elimination
Then if conventional won't work move on to more creative ways like HML - no money down - wholesaling etc. etc.
Going bankrupt while wholesaling? You would have to work hard at it.
You have been stung, I would start up again with wholesaling
Your C Buyer is the one who has to worry about getting in trouble
Sold as is, were is and how is
@Chad Clinton Welcome back to real estate! I haven't given up either. I took a bad hit in 2009, started up again in 2010, built up a decent rental portfolio and did a few fix and flips. Unfortunately, I took a big hit with a flip last year but I have a good paying "day" job and equity in my rentals so I can recover.
A big lesson I learned is to be willing to give up potential profit in exchange for sharing risk. I should have wholesaled my high end flip or found an equity partner to share the risk/profit. I have a wife and three kids and I've promised her on future deals that I'd be using more of "Other People's Money." Yes, less profit but it's far more important now for me to stay solvent. You can do everything you can to mitigate your risk but there's always the possibility of things not going as planned.
Have you worked on rebuilding your credit? I've used a certain website to help me rebuild mine (I'm not affiliated with them and I get nothing out of recommending them; PM me if you'd like the URL). Good luck!
It's really good to get so many helpful and positive responses. I appreciate any and all advice, tips, and shared experiences that you guys have.
Chad...this place rocks!
It's helped me have a much clearer understanding of my current endeavors.
you sound like someone who can really rock this industry!
Keep aiming for the top my friend!
You will do it!
Chad, the trick is to have a plan, a good plan that makes sense and stick to it. Best of luck with your endeavors!
Chad, Glad to hear you are back on board with real estate investing. If you like real estate and want to continue, do it. Just think of the situation that happened as a crash course in what not to do moving forward. The good news is that you have more experience and you can draw from that lesson valuable points to remember on your next venture.
Moving forward, set a written goal about what you want to achieve. Then write a plan that includes what action you can take. Then take action! If you need help, ask but take the first step on your own. The hardest part for everyone is starting.
Avoid over thinking. Many people get stuck before ever taking any action and then try to convince themselves that was the best thing to do. Life is wonderful and doing the things we want to do is part of real living.
Believe it or not, the entire world is waiting to see what you will bring to the table!
Welcome back and heres to a great 2015! If you haven't had an issue, then you haven't invested.
Here is a little out of the box advice. I invest with a business partner. He is the kind who likes to JUMP! There have been so many "deals" that he wanted to move on and I could get the numbers to work. I over analyze things, and he jumps to soon. This partnership has created a balance where I am willing to move forward but I also am capable of limiting our risks through careful consideration.
Without me, my partner would be negatively cash flowing or at best just owning a house. If I didn't have him, i would still be crunching the numbers.
I have my strengths and he has is. We balance each other out and we have found great success because of it.
Welcome from a fellow local guy! I actually work down on U St.
Good on you for getting back on the horse. I'm just going to leave this here:
Welcome to BP. We've all made mistakes as well and it can be discouraging. I'm glad to see your willing to try again. Shows preservance. Download and listen to the BP podcasts. They give great advice as how to avoid pitfalls while investing. Good Luck :)
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