Fear, Discouragement, and motivation

Since the last time I wrote I was working on getting into my first REI deal.  As I may have stated before I am focused on becoming a really good buy and hold investor.  I am looking into the Turner method of house hacking as my initial strategy.  Finding deals is still a little bit of a challenge but the more I network with people and the more I look around the more I discover.  Not only finding deals in the niche that I would like to pursue but also deals in other areas.  Having just finished "The book on investing in real estate with no and low money down" as well as "Estimating rehab costs" I realize that having a niche is a great thing but that should not "tunnel" your vision when it comes to investing in real estate.  Having also listened to every single podcast from Bigger Pockets in a couple months, when things come up I tend to listen even though they might not be in my line of sight.  Tunnel vision is what will curtail your investing strategies and will also not allow you to maximize your investment portfolio.  When looking at real estate or any investing we are always told to diversify, meaning being able to spot other good deals that may have not been thought of at first as good strategies.  

SO...  back to my first deal.  As I am waking up on a day-off-Friday I see a post in one of my private Facebook investor groups for a deal.  A deal from a known good investor in my area.  A deal for.... wait for it...   a mobile home.  Hmmmm... interesting.  So being the savvy investor minded person I am I jump on it.  It looks to me like the quickest and easiest and cheapest way to get a deal on the table and maybe make a dollar or two in the process.  Not only that but learn on a micro level about rehabbing and such.  So I lock in my deal and start the research.  Let me just say right away the very first thing I thought of was @John Fedro and podcast #75 (biggerpockets.com/show75).  So I go back and listen to the podcast.  Then I go to John's site.  Then I message John about what I have going on and ask for some advice... tell him the story and get his opinion.  It all sounds like a great plan to both of us and I sound like I have a good plan ahead for what I want to do and how I want to exit.  I write a few posts on BP to get some other insight on a few things and then I start cracking open books and youtube videos.  I think within two weeks I learned more than I ever thought I would want to know about mobile homes and investing in them.  I am no expert by any means but the foundation was built.  I spent time with the seller and made sure that I was tailoring my investing to his needs so that he could walk away worry free and move on to other things in his life.  Unfortunately the park owners had other plans and undercut the deal.  Was I disappointed...  a little bit would be an understatement, but I was not defeated by any means.  I felt like I had my first taste of what kind of urgency it takes to make things happen.  Even with the footwork and the research and planning the deal fell through.  I did learn a lot and was able to connect with John as well as connect on a more personal level with a really good local investor.  All in all I would say a win-win.

The take-aways from this post would be:

-Keep your eyes open to any and all deals whether they fit your strategy or not (especially if you are just starting out!).  This particular strategy, if you do it right, could be the cheapest and easiest way to get started if big money is a problem.  I mean lets look at it.  If you can buy one of these places (and in my case a place that had been gutted and pretty much all of the MAJOR work had been done... piping, electrical, insulation and new framing) for minimal out of pocket and then rehab and flip the place (or rent it our depending on the location and circumstances) for a substantial ROI.  Not a bad deal at all.

-Listen to ALL the podcasts.  If you want to start just listening to the ones that pertain to what you are looking for that is fine.  But make sure you backtrack and listen to every one because there are nuggets contained in all of them.  If I hadn't have listened to 75 I would have never ever thought to even move toward this deal.

-Open your mouth and ask... I got some great insight on this investing strategy as well as a few FREE quotes from a couple contractors that happen to be doing some major rehab work on the building I work in.  I talk to these guys every day and sometimes ask questions about dumpsters and paint and whatever else.  When I asked for a quote for siding and roofing they were all more than happy to do the legwork for me and tell me about some Home Depot secrets that I didn't know about when it comes to pricing.

-MAKE SURE YOU ARE WORKING IN THE BEST INTEREST OF YOUR SELLER!  The key to the deal for me (even though it fell through) was to spend some time with my seller and learn about his situation so that I knew how I could make it good for him.  He even mentioned it one day when we were talking that he appreciated that I actually took the time to talk with him.  Not only about the property but also about his life and his struggles.  The fact that I was there to listen made a huge difference on the kinds of things (supplies, tools, new kitchen, extra new doors, windows, and flooring, etc) that he was willing to just leave there for me since he knew what I wanted and I knew what he wanted.  He wanted to be able to  move with as little "crap" as possible and I wanted to rehab his old home and make it nice for someone else to move into.

-Use the tools you have available and do the homework.  Read the books. Listen to the podcasts. Create or steal the estimation sheets and contracts.  Network with other investors at local REIAs and on Bigger Pockets.

-Make haste slowly.  Move fast but don't move too fast.  Don't rush things and take your time.  But don't sit on the fence trying to figure out if the deal is there or not.  Know what you are looking at and if you don't know what you are looking at get some knowledgeable eyes on it that can tell you.

-Most of all.. don't get discouraged when things fall apart.  Its not the end of the world, its just the end of the world with one deal.  Use that as a springboard to move faster and smarter into your next deal.