Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Starting Out
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated 4 months ago, 08/19/2024

User Stats

1,992
Posts
1,439
Votes
Frank Patalano
Pro Member
  • Rental Property Investor
  • East Providence, RI
1,439
Votes |
1,992
Posts

So what's holding you back?

Frank Patalano
Pro Member
  • Rental Property Investor
  • East Providence, RI
Posted

When I help new investors with buying their first property I often want to know what is holding them back from pulling the trigger.

So I'll ask here. What is holding you back?

  • Frank Patalano
  • User Stats

    1,992
    Posts
    1,439
    Votes
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    1,439
    Votes |
    1,992
    Posts
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    Replied
    Originally posted by @Gina Daggett:

    @Frank Patalano just where to begin Frank. Good credit but my debt to ratio on the end is somewhat over the limit for the lender. Told I needs to put away 15,000.00 and then I can start my dream of investing. Then some mentors want money in order to even give advice. So I’ve just been studying and listening to podcast to keep my self positive but I want and need to make it happen. So a little discourage.

    Find local experienced people through your REIA. Keep networking. If you find a possible deal you can bring it to them. They can either share the deal or at least give you something for it.

    I don't know my current DTI ratio. But I am closing tomorrow on a multi. No credit check. 2 points and closing costs. That's it.


    Keep being creative. Find some deals. Credit isn't everything. It does help but you can get around it.

    Also you could find a partner with money and credit but no time.

  • Frank Patalano
  • User Stats

    1,992
    Posts
    1,439
    Votes
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    1,439
    Votes |
    1,992
    Posts
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    Replied
    Originally posted by @Martin Vehlow:

    What a helpful thread! So much good stuff!

     Thanks. One more way to help others.

  • Frank Patalano
  • PropStream logo
    PropStream
    |
    Sponsored
    Nationwide property data Use our robust, multi-sourced data to find off-market properties and close your next deal.

    User Stats

    10
    Posts
    2
    Votes
    Geoffrey M Hersch
    Pro Member
    • New to Real Estate
    • Orange County, CA
    2
    Votes |
    10
    Posts
    Geoffrey M Hersch
    Pro Member
    • New to Real Estate
    • Orange County, CA
    Replied
    Originally posted by @Remington Lyman:

    @Frank Patalano Yes Columbus is hot right now because of the job and population growth. You can find better cap rates elsewhere. Cap rates are not everything though. People invest in Columbus for the long-term outlook of the area. I do not see our city going anywhere but up. The demographics are there and we have room to spread out instead of having to go up. Our flat land is a developer's dream.

    Unfortunately, a lot of investors get scared off because our deals do not fit into their check boxes.

    There are several properties that have been renovated in Columbus in what appears to be a nice rental area close to campus as well. Would you recommend the idea of buying an already renovated (but more expensive) home that qualifies for that OSU Housing Incentive or buying an older home in need of renovation and following the BRRRR philosophy? Either way, according to my calculations, they cash flow between 8-12% that first year with the already renovated properties. @Remington Lyman might know best here!!

  • Geoffrey M Hersch
  • User Stats

    1,992
    Posts
    1,439
    Votes
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    1,439
    Votes |
    1,992
    Posts
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    Replied
    Originally posted by @Geoffrey M Hersch:
    Originally posted by @Remington Lyman:

    @Frank Patalano Yes Columbus is hot right now because of the job and population growth. You can find better cap rates elsewhere. Cap rates are not everything though. People invest in Columbus for the long-term outlook of the area. I do not see our city going anywhere but up. The demographics are there and we have room to spread out instead of having to go up. Our flat land is a developer's dream.

    Unfortunately, a lot of investors get scared off because our deals do not fit into their check boxes.

    There are several properties that have been renovated in Columbus in what appears to be a nice rental area close to campus as well. Would you recommend the idea of buying an already renovated (but more expensive) home that qualifies for that OSU Housing Incentive or buying an older home in need of renovation and following the BRRRR philosophy? Either way, according to my calculations, they cash flow between 8-12% that first year with the already renovated properties. @Remington Lyman might know best here!!

    If there was something with a 12 CAP rate, we would be buying. Are you underwriting the numbers? Don't believe the numbers that the seller's agent is giving.

  • Frank Patalano
  • User Stats

    1
    Posts
    1
    Votes
    Replied

    @Frank Patalano I’m new to investing and for me it’s figuring out where to start. I live in California and from what I hear the market is over saturated and I’m looking at investing out of state

    User Stats

    10
    Posts
    2
    Votes
    Geoffrey M Hersch
    Pro Member
    • New to Real Estate
    • Orange County, CA
    2
    Votes |
    10
    Posts
    Geoffrey M Hersch
    Pro Member
    • New to Real Estate
    • Orange County, CA
    Replied
    Originally posted by @Frank Patalano:
    Originally posted by @Geoffrey M Hersch:
    Originally posted by @Remington Lyman:

    If there was something with a 12 CAP rate, we would be buying. Are you underwriting the numbers? Don't believe the numbers that the seller's agent is giving.

    I'm learning a lot but some of the terms are new to me still Frank.  What does "underwriting the numbers" mean? Also, when I say 8-12% I meant cash on cash not Cap rate.  The cap rates are lower if I am doing this right. 

  • Geoffrey M Hersch
  • User Stats

    3
    Posts
    0
    Votes
    Daniel Dressler
    • Contractor
    • Naples, Fl
    0
    Votes |
    3
    Posts
    Daniel Dressler
    • Contractor
    • Naples, Fl
    Replied

    @Frank Patalano The most common and basic answer... fear. I’m sitting on a pre approval loan and money in the bank for a down payment. In the process of looking for a home that fits my specific criteria (I’m going to be house hacking since it’s my first one) in the Orlando area and am having a difficult time finding anything that makes sense for me. $220k is my pre approval amount but really want to try and not max that out. I ideally would like to find something that I can have my expenses paid for so that I can save up for another one within a year. Any thoughts?

    User Stats

    1,992
    Posts
    1,439
    Votes
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    1,439
    Votes |
    1,992
    Posts
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    Replied
    Originally posted by @Kenisha Humphrey:

    @Frank Patalano I’m new to investing and for me it’s figuring out where to start. I live in California and from what I hear the market is over saturated and I’m looking at investing out of state

     I understand exactly what you are saying. More and more people are investing out of state, especially in California. The best way to get started is with education. Learn as much as you can with free and low-cost tools. Also get out there and start networking. You'll find people that are in the same boat and you can work together to improve your knowledge.

  • Frank Patalano
  • User Stats

    1
    Posts
    0
    Votes
    Replied

    @Frank Patalano finding a effective way to find deals is the only thing holding me back at this time. My ultimate strategy is to buy and hold apartments, but since I'm working with no capital I have to do wholesaling until I have enough to work on some deals.

    User Stats

    15
    Posts
    4
    Votes
    SALIAH S.
    • New to Real Estate
    4
    Votes |
    15
    Posts
    SALIAH S.
    • New to Real Estate
    Replied

    I am eager, but still kind of nervous. I would love to a have a mentor that I can call and speak to. Also, finding an owner to have a Master Lease Agreement with. 

    User Stats

    1,992
    Posts
    1,439
    Votes
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    1,439
    Votes |
    1,992
    Posts
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    Replied
    Originally posted by @Geoffrey M Hersch:
    Originally posted by @Frank Patalano:
    Originally posted by @Geoffrey M Hersch:
    Originally posted by @Remington Lyman:

    If there was something with a 12 CAP rate, we would be buying. Are you underwriting the numbers? Don't believe the numbers that the seller's agent is giving.

    I'm learning a lot but some of the terms are new to me still Frank.  What does "underwriting the numbers" mean? Also, when I say 8-12% I meant cash on cash not Cap rate.  The cap rates are lower if I am doing this right. 

     Sorry about that. A 10% cash on cash is definitely a good start. In regards to underwriting. I am talking about you setting up a spreadsheet and reviewing each number. Are you getting actual rents? Or are they giving you pro forma or Market rents? All the expenses in line with what you expect? Did they forget to include any numbers? Such as Property Management, repairs, Etc? You have to run your own numbers and not just go by the Blind Faith of the selling agent.

  • Frank Patalano
  • User Stats

    1,992
    Posts
    1,439
    Votes
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    1,439
    Votes |
    1,992
    Posts
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    Replied
    Originally posted by @Daniel Dressler:

    @Frank Patalano The most common and basic answer... fear. I’m sitting on a pre approval loan and money in the bank for a down payment. In the process of looking for a home that fits my specific criteria (I’m going to be house hacking since it’s my first one) in the Orlando area and am having a difficult time finding anything that makes sense for me. $220k is my pre approval amount but really want to try and not max that out. I ideally would like to find something that I can have my expenses paid for so that I can save up for another one within a year. Any thoughts?

     There is a difference between fear and the appropriate use of knowledge. It sounds like you have all the steps in order but you just have to find an opportunity. There are very few deals out there in the open market right now. That's why so many people are looking for off-market deals. I don't know your Market. Having all of your expenses paid for is pretty hard to do in many markets right now. Perhaps you can buy was just a little bit out of pocket every month.

  • Frank Patalano
  • Steadily logo
    Steadily
    |
    Sponsored
    America’s best-rated landlord insurance nationwide Quotes online in minutes. Single-family, fix n’ flips, short-term rentals, and more. Great prices.

    User Stats

    5
    Posts
    4
    Votes
    Bentley McKean
    • Real Estate Broker
    • Oxnard
    4
    Votes |
    5
    Posts
    Bentley McKean
    • Real Estate Broker
    • Oxnard
    Replied

    @Frank Patalano I feel like the area In California I live in is too expensive for me to invest into. I also don’t know if I would be comfortable investing out of state for my first property.

    User Stats

    1,992
    Posts
    1,439
    Votes
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    1,439
    Votes |
    1,992
    Posts
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    Replied
    Originally posted by @Ray Jackson:

    @Frank Patalano finding a effective way to find deals is the only thing holding me back at this time. My ultimate strategy is to buy and hold apartments, but since I'm working with no capital I have to do wholesaling until I have enough to work on some deals.

     You just have to keep trying different strategies in educating yourself and multiple ways to find deals.

    in regards to having no money there is nothing wrong with sharing in a partnership to get a few deals done. 50% of something is better than 100% of nothing.

  • Frank Patalano
  • User Stats

    1,992
    Posts
    1,439
    Votes
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    1,439
    Votes |
    1,992
    Posts
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    Replied
    Originally posted by @SALIAH S.:

    I am eager, but still kind of nervous. I would love to a have a mentor that I can call and speak to. Also, finding an owner to have a Master Lease Agreement with. 

     There are plenty of mentors that you could speak to. Most charge some sort of money. Some are worth  it, some are not. I've found that my best mentors I've been part of my local reia. Go to your Go local networking meetings.

    finding someone who wants to do a master lease option is harder but not impossible.

  • Frank Patalano
  • User Stats

    3
    Posts
    0
    Votes
    Daniel Dressler
    • Contractor
    • Naples, Fl
    0
    Votes |
    3
    Posts
    Daniel Dressler
    • Contractor
    • Naples, Fl
    Replied
    Originally posted by @Frank Patalano:
    Originally posted by @Daniel Dressler:

    @Frank Patalano The most common and basic answer... fear. I’m sitting on a pre approval loan and money in the bank for a down payment. In the process of looking for a home that fits my specific criteria (I’m going to be house hacking since it’s my first one) in the Orlando area and am having a difficult time finding anything that makes sense for me. $220k is my pre approval amount but really want to try and not max that out. I ideally would like to find something that I can have my expenses paid for so that I can save up for another one within a year. Any thoughts?

    You are right. I am definitely working through the fear of starting out, but am currently held up with just getting that first opportunity. My fear is that my fear is going to hold me back when an opportunity presents itself, if that makes sense. I am just anxious to get myself started as soon as possible and begin my journey. Thanks for the reply!!

     There is a difference between fear and the appropriate use of knowledge. It sounds like you have all the steps in order but you just have to find an opportunity. There are very few deals out there in the open market right now. That's why so many people are looking for off-market deals. I don't know your Market. Having all of your expenses paid for is pretty hard to do in many markets right now. Perhaps you can buy was just a little bit out of pocket every month.

    User Stats

    1,343
    Posts
    2,112
    Votes
    Tyler Gibson
    Agent
    • Real Estate Agent
    • Orlando, FL
    2,112
    Votes |
    1,343
    Posts
    Tyler Gibson
    Agent
    • Real Estate Agent
    • Orlando, FL
    Replied
    Originally posted by @Daniel Dressler:

    @Frank Patalano The most common and basic answer... fear. I’m sitting on a pre approval loan and money in the bank for a down payment. In the process of looking for a home that fits my specific criteria (I’m going to be house hacking since it’s my first one) in the Orlando area and am having a difficult time finding anything that makes sense for me. $220k is my pre approval amount but really want to try and not max that out. I ideally would like to find something that I can have my expenses paid for so that I can save up for another one within a year. Any thoughts?

     Orlando is a tough market. I am a rental property investor and Realtor here. You said you want to house hack but not what type of property you are looking for. Single family or small multi? If you need some help looking for a property I would be happy to help. 

    business profile image
    GPG Team
    5.0 stars
    65 Reviews

    User Stats

    4
    Posts
    3
    Votes
    Replied

    Every time I come to bigger pockets I feel like buying a duplex or triplex immediately. We became landlords by mistake. We were expecting another child, had to get more space so we bought a house and rented out the other. It does not cashflow and we did not know anything until we got into that situation. The cash we get just covers the mortgage and taxes. That was a year ago. We intend to make repairs, increase the rent and sell it in the Spring. We have however learnt a lot over the past one year through bigger pockets and our own experience with this bubble gum on our shoes. So what is holding us back? I guess we are still self educating. We do not feel comfortable with the information we have so far and we haven't identified a good market. MA is too expensive. We have also been looking at NH. We have been saving and we could by a duplex in a market like Manchester NH or Franklin today but we do not feel like we have all info we need to make an informed decision.
    Over the next few weeks one of our goals is to get a good agent with experience in MA, NH, RI and start identifying where to invest. I guess that is the next step. We are still newbies. This is taking too long!

    User Stats

    1,992
    Posts
    1,439
    Votes
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    1,439
    Votes |
    1,992
    Posts
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    Replied
    Originally posted by @Bentley McKean:

    @Frank Patalano I feel like the area In California I live in is too expensive for me to invest into. I also don’t know if I would be comfortable investing out of state for my first property.

     If you are going to invest out of state you have a few different options.

    The first thing that I would do is pick a partner with some experience (I know that you have experience) Work together to research markets and find the first deal. Share the risk and the reward.

  • Frank Patalano
  • User Stats

    1,992
    Posts
    1,439
    Votes
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    1,439
    Votes |
    1,992
    Posts
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    Replied
    Originally posted by @Daniel Dressler:
    Originally posted by @Frank Patalano:
    Originally posted by @Daniel Dressler:

    @Frank Patalano The most common and basic answer... fear. I’m sitting on a pre approval loan and money in the bank for a down payment. In the process of looking for a home that fits my specific criteria (I’m going to be house hacking since it’s my first one) in the Orlando area and am having a difficult time finding anything that makes sense for me. $220k is my pre approval amount but really want to try and not max that out. I ideally would like to find something that I can have my expenses paid for so that I can save up for another one within a year. Any thoughts?

    You are right. I am definitely working through the fear of starting out, but am currently held up with just getting that first opportunity. My fear is that my fear is going to hold me back when an opportunity presents itself, if that makes sense. I am just anxious to get myself started as soon as possible and begin my journey. Thanks for the reply!!

     There is a difference between fear and the appropriate use of knowledge. It sounds like you have all the steps in order but you just have to find an opportunity. There are very few deals out there in the open market right now. That's why so many people are looking for off-market deals. I don't know your Market. Having all of your expenses paid for is pretty hard to do in many markets right now. Perhaps you can buy was just a little bit out of pocket every month.

     Like I said I don't know Orlando. Find an accountability partner to remind you of the right thing to do.

  • Frank Patalano
  • User Stats

    1,992
    Posts
    1,439
    Votes
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    1,439
    Votes |
    1,992
    Posts
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    Replied
    Originally posted by @David Mugwe:

    Every time I come to bigger pockets I feel like buying a duplex or triplex immediately. We became landlords by mistake. We were expecting another child, had to get more space so we bought a house and rented out the other. It does not cashflow and we did not know anything until we got into that situation. The cash we get just covers the mortgage and taxes. That was a year ago. We intend to make repairs, increase the rent and sell it in the Spring. We have however learnt a lot over the past one year through bigger pockets and our own experience with this bubble gum on our shoes. So what is holding us back? I guess we are still self educating. We do not feel comfortable with the information we have so far and we haven't identified a good market. MA is too expensive. We have also been looking at NH. We have been saving and we could by a duplex in a market like Manchester NH or Franklin today but we do not feel like we have all info we need to make an informed decision.
    Over the next few weeks one of our goals is to get a good agent with experience in MA, NH, RI and start identifying where to invest. I guess that is the next step. We are still newbies. This is taking too long!

     Well I can definitely recommend some killer agents in Rhode Island.

  • Frank Patalano
  • User Stats

    72
    Posts
    27
    Votes
    Adam Leitman Bailey
    • Attorney
    • New York, NY
    27
    Votes |
    72
    Posts
    Adam Leitman Bailey
    • Attorney
    • New York, NY
    Replied

    This is such an interesting thread. I learn something new about real estate every day and these individual stories are some of the most interesting and most efficient ways to learn from others mistakes. I hope this thread continues to grow!

    NREIG  logo
    NREIG
    |
    Sponsored
    Customizable insurance coverage with a program that’s easy to use Add, edit, and remove properties from your account any time with no minimum-earned premiums.

    User Stats

    1
    Posts
    0
    Votes
    Ezequiel Castellanos
    • Rental Property Investor
    • Poughkeepsie, NY
    0
    Votes |
    1
    Posts
    Ezequiel Castellanos
    • Rental Property Investor
    • Poughkeepsie, NY
    Replied

    @Frank Patalano $50,000 of student loans unfortunately. I just graduated in May.

    User Stats

    1,992
    Posts
    1,439
    Votes
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    1,439
    Votes |
    1,992
    Posts
    Frank Patalano
    Pro Member
    • Rental Property Investor
    • East Providence, RI
    Replied
    Originally posted by @Adam Leitman Bailey:

    This is such an interesting thread. I learn something new about real estate every day and these individual stories are some of the most interesting and most efficient ways to learn from others mistakes. I hope this thread continues to grow!

     Thanks. This thread has been a great ride. 140+ pages later.

  • Frank Patalano
  • User Stats

    5
    Posts
    4
    Votes
    Bentley McKean
    • Real Estate Broker
    • Oxnard
    4
    Votes |
    5
    Posts
    Bentley McKean
    • Real Estate Broker
    • Oxnard
    Replied
    Originally posted by @Frank Patalano:
    Originally posted by @Bentley McKean:

    @Frank Patalano I feel like the area In California I live in is too expensive for me to invest into. I also don’t know if I would be comfortable investing out of state for my first property.

     If you are going to invest out of state you have a few different options.

    The first thing that I would do is pick a partner with some experience (I know that you have experience) Work together to research markets and find the first deal. Share the risk and the reward.

    Do you think it is a bad idea to invest out of state for the first deal? I really specialize in Industrial real estate, so I may want to stick more to that instead of multifamily.