How can I avoid the mistakes that YOU made??
Hi everyone, I'm going to try to make this short and sweet!
I'm moving back to Chicago in 6 days and I'm ready to jump into Real Estate (finally!) I have not done any deals/taken any action yet in Real Estate because I knew this move was coming.
What I have done is read, studied and listened. I've listened to any/every Real Estate Investing podcast there is and experienced investors always talk about all of the mistakes that they made. How can I avoid those? I know I will make mistakes, but I want to make as many correct moves as possible.
Successful investors- If you had to start over, what would you do different? What would you do the same? What was a waste of time and what was the best move that you made? Did you start out solo or have a partner?
Just so you know what my plan is to better frame your answer- I'm going to go for my real estate license right away to learn more in depth about purchasing/selling properties- I learn best in a classroom/organized setting so I think this will be best.
I want to purchase a small multi-family unit in/around the Southwest Suburbs within 4 months of the move. I'm working on a personal loan with a family member and will do a FHA or 203K loan. We will most likely do a 203K to have room for repairs.
I want to get into a situation where I'm living rent free as quick as possible so I can save for my wedding and purchase more property! The end goal is to be a full time investor within 18-24 months of next Monday! (right now I work full time in travel)
Any advice/thoughts will be incredibly helpful! (especially from investors in the same area)
Thanks for the time
Megan
Most Popular Reply
Megan,
When I first got started more than 10 years ago I asked the same question, but didn't get answers from experienced people. I got a lot of opinions, but no one willing to be vulnerable. So, here's some of the things I would recommend:
Don't worry about LLC/Corps until you have enough equity that your insurance isn't sufficient.
Cash flow is King. My first investment property was negative on the cash flow. But, because I had a six figure job, I wasn't worried about it. Then the Recession came and I lost the house. It's hard to lose a house with solid positive cash flow (50-65% of gross). It doesn't take much of a hiccup to lose a house with negative cash flow.
Repairs will almost always be more than you expected. My partner always says, "I hope to buy a house someday where the repairs will be less than what I expected."
Don't be in a rush. Be patient and make sure it's a deal. It's better to not buy a house than to buy a bad one. There's a lot of hype and gurus going around that make the business seem like a no brainer. It's not. You have to kiss a lot of frogs to find a prince.
Master a neighborhood and stick with it. You will do better sticking to a neighborhood that is close than one that is far away.
Deals are found when someone makes a mistake. Either the agent, the seller, or the buyer. An agent or seller can not know their market and misprice a home.
HTH,
Robert