(Real Life) Hurdles to Real Estate Investing

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I’ve written some articles like these before where I want everyone reading to give their input. This time I want to hear about the biggest hurdle you have ever hit as a real estate investor. What was it and how did you overcome it?

I’ll tell you mine. Mine didn’t show up until the end of my first couple of years rocking it out as a brand new investor. The first couple years happened so fast and smoothly for me, looking back it’s almost shocking. I didn’t even mean to get into real estate or buying properties at all, but it kind of fell in my lap and the momentum just kept going. The momentum kept going so strong that I was able to start my real estate referral company. All of that success led to the biggest hurdle of my real estate investing career- financing.

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My Biggest Hurdle

Life was so much easier when I qualified for a mortgage. Even qualifying for the mortgage didn’t solve everything as I had to use combinations of loans, credit cards, and investor partners to fund the down payments, but man it still made everything more doable! How did I overcome this hurdle? I haven’t yet! I’ll certainly let you know though if I figure that one out.

In the meantime, what was the one biggest investing hurdle to date that you have experienced? How did you overcome it? (I’m secretly going to be waiting for someone to say it was their own mind!)

Go!

Photo Credit: Guillaume Lemoine via Compfight cc

About Author

Ali Boone

Ali Boone(G+) left her corporate job as an Aeronautical Engineer to work full-time in Real Estate Investing. She began as an investor in 2011 and managed to buy 5 properties in her first 18 months using only creative financing methods. Her focus is on rental properties, specifically turnkey rental properties, and has also invested out of the country in Nicaragua.

27 Comments

  1. Nice artice, Ali.

    Negotiating creative deals was my biggest hurdle.

    I learned how to buy sub2, cfd, wraps – aitds, private mortgages on free and clear houses, etc. when I was 28. That was in 1987.

    I do not need traditional finance, just an open minded seller with urgency to sell.

  2. I had a problem to buy 1031X drug store in 2001 & 2010. In 2001 someone decided to buy all available Walgreens, and in 2010 rich people beat me with all cash deal. Dut to 45 days identification period deadline, identified one property in 2001 on last day, without even seller knowing it. In 2010, ended up buying property in a state ( WI ) that did not excite me, had to pay full price both times, but happy now with 4.25% COC, and no more worries for 25 yrs???!!! due to guaranteed lease.

      • I think the best thing is to figure out your goals, find people that can help you reach those and then acting. A lot of people have great ideas, but never act on them. I also think sometimes you have to get the property that best fits your needs when the “perfect” one is not available (bc it never will be). As long as you have thought out what can go wrong and are prepared for it, you are moving forward.

  3. I can honestly say my biggest hurdle, and the one I still face, is that everyone who’s support I need I’ve never got. My thoughts and ideas seem illogical based entirely on their own life experiences. Sadly, I still face this and each day my idea of a future I see are just fading away.

  4. Financing and down payments are the biggest stuggle for me. One method I have considered is opening LOCs and using those to purchase. It is so much easier to do and allows quicker closing when you find your property w/ less risk of something going wrong even if the rate might not be as good.

  5. Biggest hurdle; ignoring friends and my now ex business partner.
    First truly creative deal was a $70k discount short sale on a 3 unit (long term hold) property this was in April of 2005.
    Everybody said “Why would a bank take less then the full value of the note, in this hot market?”

    You say a short sale? Never going to happen!
    Next short sale shut up all of the naysayers $162k discount on a $296k note in 2006. $10k in repairs which were all cosmetic, and a flip netting $50k. After that one most of these folks had two questions, how can I also do this, or do you want some money for your next deal?

  6. Great topic, Ali!

    Learning how to hire good, reliable and honest people (especially contractors!) has been my biggest hurdle. It’s the “good” and “reliable” that may come easier but the “honest” part can definitely be a challenge, per Warren Buffett.

    Over the years, I find myself constantly looking for new folks to hire. There have been times when I’ve had to use back-ups as those I usually use could be busy and/or out of town. Nowadays, there are those who are retiring who have been working with me for years so it’s definitely a constant search.

    As with anything, I guess with enough experience it gets easier!

    I continue to enjoy your write-ups, thanks for sharing! 🙂

    • You bet Rachel! Thanks for commenting and sharing. You are very right about the team. I would assume all investors face this same problem (except the ones who insist on doing everything themselves). Good to point it out as an obstacle!

  7. Good question Ali. I’d say my biggest hurdle has been time. There are so many things competing for what little time we all have in our daily lives – it’s been difficult for me to carve out the necessary time to get things done, learn more, hang out with friends and family and maintain a healthy balance of the other things that give quality to life. I think I’ve been able to get better each year, but it’s a challenge that will probably never go away.

    • Phew I can second that Seth. I need at least two clones to keep up with my workload. Although I never have the problem of making time for the fun and people sides of lifestyle balance 🙂 It’s the work part I have a harder time spending as much time as I need to on!

  8. Nice article Ali.
    @Mat.. how did you do it. eheh Would love to hear about it. I think the BP community would love to hear/learn about it too.

    One of my first/biggest hurdle is just ignoring a family advice to just not buy the property. He though it was a scam. Why would the seller sell it if it was cash flow positive? I just did some due diligence. Its working ok for the time being. I still had a little doubt myself. I guess you have to do you part to make sure the deal is a DEAL. Make sure all the numbers and data they give are correct.

    • This seems to be the common answer Kevin. Very interesting! So you conquer that one just by doing your own due diligence. Good for you.

      Not just for you but for anyone reading who has the problem of naysayers… does everyone know the Crabs in the Bucket analogy?

      Real estate investors are those crabs in a bucket who are trying to climb out and escape the confines of the bucket. Anytime there is a crab trying to crawl out though, all the crabs in the bottom of the bucket are constantly tugging on the crab trying to leave and pulling him back in! As an investor, you will always have the crabs at the bottom of the bucket trying to pull you back down to stay with them. You just have to kick them off and keep climbing!

  9. I am going through my biggest hurdle to-date. Capital!! So we are at the same obstacle right now Ali. I still use my own capital for my projects. I have spoken and/or applied with over 30 lenders, credit card companies, and private money lenders this year all to hit a dead end!!

    Amazing how people tell you they can help when they actually can’t. You see I have a great track record now with my portfolio of buy, rehab, rent and cash flow. But my personal credit ‘score’ sucks because of my credit card usage on rehabs. Plus I had a bankruptcy 3 1/2 years ago.

    Without going into details, I make plenty of money without including my wife’s income or my rental property income. My wife’s income and rental income is not used for any of our bills. But I STILL can’t get any funding for investment properties. So at this point, all of the people who keep telling me, and posting online that claim it’s EASY to acquire lending for Real Esate MUST have a GREAT credit score of 720 or higher.

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