First dose of anxiety?

Question

Well as I've state before, I am new to the world of real estate investing. I consider myself in the learning phase. I spend every moment at work listening to the podcasts over and over. I wake up at 4 a.m. (two hours before I need to leave for work) to read and research books, articles, and blogs because when I come home from work I have my responsibilities of being a husband and father of two.

So here's where I am going with this...

Last night I decided to start getting my ducks in a row. Researching home inspectors, real estate attorneys, contacting my CPA to see if he works with real estate investors or to point me to someone who does, and researching general contractors.

I only have a few contacts as far as other real estate investors in the area so before I go and ask them for any suggestions I wanted to have my prior research done so they don't think I'm trying to take the easy road of just trying to use their contacts.

So after hours of doing my homework, I decided to take a look at some listings in my target areas on some websites (Zillow, Trulia). I'm assuming many other first time investors have probably come across that same feeling of anxiety as I had started to feel. Seeing all the different homes for sale and foreclosure listings in those areas became a little overwhelming. Just as I though I had a good grip on what I would be looking for, I was now struggling with wondering where the heck do I begin. I realize finding motivated buyers through direct mail marketing or driving for dollars will help generate leads, but I couldn't help feeling lost as I was sifting through the listed properties. Does anyone have any suggestions to help me direct my focus towards finding the right properties or narrowing my focus? Have many of you also encountered this feeling of wondering where to really start? Thank you for your time.

Adam Settelmyer

Jean Bolger · Answer

I would spend a few more weeks and take a bunch of those mls listings and do practice analysis on them. You don't even have to go look at them for this. Do some "google driving" around the block. Use the ones with lots of photos and make up scenarios. For instance, pretend you are looking for a rental. Find a listing with plenty of pictures, estimate what would need to be done to get it rent ready. Think of the variables (what if it needs a furnace?) Figure out what the rent would be using rentmetric.com and rent.com. Apply the 50% rule. Add in some more variables for different financing possibilities. Do this a bunch, until you can start seeing pretty quickly whether something might meet your criteria.

I use a little iPad app called real estate evaluator, because I don't trust myself to do the math consistently each time!

IMO, if you can find good opportunities on the mls, that's just fine. The whole process of finding motivated buyers who have not yet listed their houses sounds like a job in itself. I'm sure in some markets it is necessary, but not everywhere.

I did a LOT of this practicing so when I finally found a great deal I was pretty darn certain it really was a great deal. I am so glad I passed on some of the earlier ones that were just OK.

I am not a flipper, but if I were I would get J Scott's books (that everyone on BP seems to recommend) and do exactly the same process as above.

Steve Lohbeck · Answer

@ WG I am also a new rookie in town just getting my feet wet. I need all the help and advice from the experts on this website. So step by step ways to find motivated sellers and cash buyers plus profit making properties would be appreciated.

Wendell De Guzman · Answer

@Adam Settelmyer , my focus now is wholesaling properties but I have done several rehabs. On my first rehab deal, I did the following:

1. Decided on my focus areas, target properties and lead funnel

2. I lined up a hard money lender to fund the deal for me

3. I interviewed several contractors

Once I got a house under contract, I got the contractors to bid on the rehab project. I utilized a real estate agent to sell the house.

To avoid being overwhelmed, I focus on one aspect of the rehab process at a time. If I were you, I will focus first on lining up hard money lenders so you know, you will have the money when you find a good deal. Then once you lined up a good lender, then hit the pavement and look for properties to buy. Then once you find a good property under contract (not yet closed), look for contractors to give you bids on the property. By doing this, by the time you close the deal, your contractor will hit the ground running.

Steven Hamilton II · Answer

@Adam Settelmyer ,

If you have questions, don't hesitate to ask. I'm in the North burbs.

Adam Settelmyer · Answer

Ali thank you for putting that perfectly into words. Half of what's going on upstairs is sifting through all the information I have read and yes that has made me think from time to time that it seems much harder than it probably is (not to say by any means that it's easy).

I mentioned before I wanted to start with flipping to generate some cash to start putting towards my ultimate goal of rental properties. The reason I like this as my starting point is I am in the construction industry and many times I see high rises and other buildings in chicago go from completely gutted to beautifully finished. I have good vision on what a "naked house" will look like when it needs to be dressed up. I'm choosing to stick to my strengths and hope it can generate some solid income to reinvest.

Ali Boone · Answer

Adam, I think the biggest thing is to realize that there is soooo much info out there, it can make everything seem much harder and complicated than it really is.

What exactly is it you want to do? Buy rental properties? Wholesale? Flip? What? Identifying that (and maybe just to me and you already know it) can help in giving you more concrete info on what to focus on to keep it less overwhelming.

Mercy Ukpe · Answer

@Adam Settelmyer - I'm in the same boat you're in, just starting out now to read, learn as much as I can and develop marketing strategies and when I think I have a hold on it, I look at some properties and get anxious. It's definitely a good idea to go to a local REIA as Scotty mentioned. I did this and found some valuable resources and potential mentors and buyers. I've debated whether I should contact a RE agent but I'm leaning towards doing that so I can become more knowledgeable about my target area and focus my marketing there. I'll definitely use Jean's advise about practice doing property analysis. Good luck.

Adam Settelmyer · Answer

Thanks again I take every bit of help to heart and appreciate all of you taking the time in response to my post.

I welcome any and all advice.

John Knappmann · Answer

Adam, if you have a target area in mind, drive it and pay attention to the properties in that area that seem to get your attention.  Odds are there are a few names of realtors that keep popping up.  Start by talking to them, be honest about your goals, and give them a chance to show you some properties.  They know the area.  If the numbers work, give them your business.  You may need some hand holding on the first deal or two before you start cold calling or sending letters.  At the very least, you need an education, on the ground, about the area you want to target.

Anxiety is good.  It means you understand you don't just show up and money falls in your lap.

Scotty Hamill · Answer

@Adam Settelmyer Welcome to a great website where you can have tons of information at you fingertips. I have had anxiety as well but don't let it stop you. Learn as much as you can and ask any questions because their are tons of great people here that will help. Another great place is your local REIA. You can meet lots of people that you can network with.

First dose of anxiety?

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