Changing my Mindset - Any Advice?

[Vincent Pirrone]

I've been here listening and reading things on BiggerPockets for a few years now.

In December 2018 I finally decided to pull the trigger and buy my first house. I bought the house with the intention of turning it into a duplex and living in half of it. I was successful in that.

I also refinanced it to get my mortgage payment lower. And now I only contribute about $200 towards the mortgage and I cover all of the utilities.

And from there I thought I was good. Took a step back to admire my work. I was pretty proud.

And then I realized that I screwed myself (can I say that on here?).

First, I bought a house that appraised at the value that I bought it. Zero Equity. Terrible.

Second, at the time I was refinancing my house, my car died completely so in order to afford the car I had to combine all of my credit card debt into a personal loan to raise my credit.

Now, I have a Mortgage, Personal Loan, Car Loan, and Student Loans. My debt to income ratio is about 43% (or 35% with my tenant). And, according to the bank I only have 7% equity (Zillow and Redfin show me at 15%) in my house, currently.

Basically, moving forward with investments using this house, is a bust.

So I gave up. Had an anxiety attack. No hope.

I started scrambling to start other side businesses to make enough money for another down payment and repair costs. My goal was to get an extra 30k. Fast.

I started side business after side business. Trying to make that extra buck. But, they all failed. Just reinforcing my draw towards failure. I was starting to really give up. But I always have my heart set on escaping this rat race.

So I kept working, every chance I got. And then boom. Another mental breakdown. (Actually, happened last night).

But last night, I also had the truth thrown at me by some loved ones. I work too hard. I have really high expectations of myself. And, I'm just generally too hard on myself and don't give myself credit for what I have accomplished.

So, I decided to take a step back and regroup.

I'm only paying $200 plus utilities for my housing. That's pretty phenomenal.

I have a great work ethic. Sometimes a little too hardcore.

I understand the ins and outside of basic real estate. Not many people my age do.

My current house is a dead end in terms of investing. But one day it will be my greatest asset.

I have decided to become more serious about real estate and learn how to take hold of my situation and make it work for me. I will be attending local groups, talking to people, learning how they invest and start gathering new ideas that I might be able to use. Sometimes you just have to force yourself to take a step back and see where you're at, what you have accomplished, and where you can go from here.

If anyone has any comments or advice, I would love to hear from you. Thank you.

[Michael Ealy]

@Vincent Pirrone, 

First of, congrats on actually taking action with what you've learned here on BP and getting a deal. Also, as others said, with a $200/month house payment - that's not bad.

Second, I would turn these "problems" or "failures" or stumbling blocks into stepping stones to success. Here's a good graphic that illustrates this:

For instance, now that your debt to income ratio prevents you from getting a mortgage, this is an opportunity to learn CREATIVE FINANCING. I bought my first couple of deals without using banks through seller financing (which is a form of creative financing). You can also buy properties with the help of private lenders and credit partners (meaning, other people use their credit to get the mortgage for you - again, this is a form of creative financing).

The fact that you need cash, you can learn how to wholesale or maybe get a real estate agent license so you can sell houses as your side-hustle while allowing you to learn your local market (and your MLS access allows you to study your market deeper).

Real estate investing is like life. Sometimes you take one step forward only to take two steps backwards. But, when you learn from the failures and more so if you turn them into stepping stones, then success becomes a sure thing as long as you don't quit.