What’s your biggest barrier to getting started?

Question

Wondering what other people struggle with when buying making their first investment. For me personally, I don’t have the capital to invest in-state (California) and don’t feel I have the network/resources to go out of state. How about you?

Joe Villeneuve · Answer

Money is a barrier, but that can be overcome easily with the proper understanding of how money works.  Finding "deals" can be a barrier too, but that can also be easily overcome with an understanding of how to analyze markets to find the micro-markets to invest in.

The biggest barrier to starting, and moving forward after you start, is a complete lack of understanding of what a plan is, and how to develop,...and stick to one that you design specifically for you and your own financial Goals.

It starts with a being able to set your goals. They are financial. They are ALWAYS financial. They are always based on two numbers...with $$$ in front of them:
1 - How much profit is needed to pay off all of your "personal" debt (i.e...credit cards, cars, student loans, etc...).
2 - How much monthly income (cash flow) is needed to cover all of your monthly bills (i.e....utility bills, insurance, gas for the cars,...).

Examples of what goals are NOT would be:
1 - Financial independence
2 - Quitting job
3 - Exiting the "Rat Race"
These are not measurable, therefor they are NOT goals. These are events that are impacted by achieving your financial goals. Most investors who assume these are goals, will then not know what to do to get there. They won't know if they are making progress, or how much progress, since they have nothing to measure that progress by. Set your financial goals, and break them down to a series of measurable groups (of individual items that made up those financial goal totals). These are your measurable "milestones". Focus on picking them off, in the order you've set them up (now you're seeing progress), with the added rule of including in each "milestone" the means (added profit) to setup the next milestone financially. Then, just follow the breadcrumbs.

The biggest barrier to REI success, and just starting, is the lack of a complete REI plan, based on exact monetary goals (numbers with $$$$ in front, not %%% behind).

Jake Wiley · Answer

@Samantha Stevens I think you might be wording your question wrong.   I am a big believer in setting your mind right and being clear on where you are going.   Based on your question, you are looking for the barriers rather than the solutions.

In reading the post you've stated that your barriers are network and resources to go out of state.   I'd turn that around and focus on how you can work on the network and resources to go out of state if that's what you are looking to do.   Or... is there a possibility that within 90 minutes of where you live there is a viable option that is not outside of your resources and capabilities.

The obstacles are real, be honest with what they are, but don't go looking for more.    Unfortunately, it is often a lot easier to convince yourself there are too many obstacles and then go look to validate that assumption than to systematically work to take the obstacles out.

You can do this - Good luck!

Drew Sygit · Answer

Detroit is the "land of opportunity" for investors, so you might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities, City of Detroit Neighborhoods and comparing Metro Detroit to other hotspots investors usually consider:

https://www.biggerpockets.com/...

Tarik Shahin · Answer

100% agree with Jake and others that shared their insight. Nowadays, there's so much information available online to make an informed decision and manage risk. Look at places where there's positive net migration and plenty of job opportunities in industries such as healthcare and education. You can find out if an area is "safe" by looking at the school districts online, virtually driving through the neighborhood on google maps, calling local property management companies or police station, etc. Once you've pinpointed a few areas, start doing your digging but try avoid getting into a state of "analysis paralysis" where you can't make a decision because of too much info. Risk will always be present but it can also be calculated and managed especially with the internet and resources readily available to you. Start with one acquisition and build from there. Good luck!

Samantha Stevens · Answer

Thanks everyone for all the advice and encouragement! Really appreciate it :) I am also just genuinely curious what the most common obstacles are in the industry, as I like hearing other peoples stories and experiences. So please feel free to share, as it’s great to remember we’re all in this together!

Nicholas L. · Answer

@Samantha Stevens I like what Jake Wiley said.  Can you find a market within 2, or even 4, hours drive to get started in?  This would let you make trips to see properties, meet folks in person, etc.  Make a network in that market - go to REIAs, find agents, find lenders, visit properties.

What’s your biggest barrier to getting started?

Most Popular Reply