doing your first deal....

doing your first deal....

Member since 2008 · 452 posts · 18 votes

Just a word of advice to beginners who have not yet bought any property....

One major problem that a lot of new people run into is just getting started. The biggest problem I believe is that people end up thinking too much and almost talk themselves into either doing it later, or not doing it at all.

The key is just this..."don't think so much". Just do it. Just do the actions. And do not think so heavily upon these idiotic worst case senarios that will never happen, like a bank foreclosure. Ya right.

Just get a property and rent it out. Just do the actions it takes to buy and stop thinking so much and over analyzing everything. You just got to get that first deal out of the way. Once you get that first deal out of the way it's like losing your virginity. After that it only gets easier. So stop looking at pics of property, jerking your weed and fantasizing about what it would be like to have one; instead just go find one and do it!

No one knows what they're doing the very first time. All you got to know is this. You just got to find one, make an offer, get a mortgage, or two, buy it and rent it out. No big deal. That's the steps. So what are you waiting for you wanker!

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  • Real Estate Coach · Member since 2008 · 32 posts · 0 votes
    19y

    Ya well maybe some us of like being seminar junkies. We don't like to loose every penny we saved up. There are lots of bad deals too. It takes time to find the right deal. I've seen lots of deals I should have bought but I just didn't have the guts to buy for fear of loosing my shirt. I have to dog paddle before I can swim. Your lucky you probably had a mentor that bolstered your confidence before you took the big plunge! What do others think? Are you too scared to do your first deal??? The first is always the scariest!!!

  • Member since 2008 · 249 posts · 6 votes
    19y

    Heck yeah, I was scared to do my first deal, but I still did it and that's r2d246's point.

    I agree that having a mentor takes the edge off and gives you a lot of support and that's what he was trying to say. If you're having trouble analyzing a deal and can't figure out where to go next with a property, get on here and post a question. If you have a specific question about financing, management, appraisals, etc, get on here and ask it.

    I can't tell you the countless hours I've spent talking with people on the phone, forum and through email just helping them from biggerpockets. I know many others have done the same thing. You've found a place where people want to help and don't always have to get something, meaning money, from it to do it. If you're terrified of the first deal, welcome to the club. Now let someone who knows how to analyze it and ask the right questions point you in the right direction. It will be scary the first time, but when you see the numbers in front of you and they make sense, your desire will overcome your fear and you'll make the right choice.

    Josh has done a heck of a job of creating a place where you can learn and grow as an investor. Use it and do that first deal.

  • Member since 2008 · 452 posts · 18 votes
    19y

    Speaking about seminar junkies, it's Tuesday. Isn't there a meeting on tonight. Maybe some babe will teach us about the silver lining Bling. *lol* ...."and so we all wear silver, seeee". LOL

  • Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
    19y

    Bling Bucks,

    There is every reason to be cautious when you're first starting. You should definitely ask questions, read books, join your local REIA, post questions on this forum, etc. The truth is that the VAST MAJORITY of newbies fail. The number one reason they fail is that they don't have sufficient cash flow for their business to survive.

    "Just Do It" is great advice if you're thinking about starting an exercise program, but it is terrible advice for buying real estate. First, learn everything there is to know about your business. Then, thoroughly learn your market. Develop a reallistic business plan using real world numbers. Then, after you've done your homework, THEN buy a property. Don't mistake what I said. I'm not saying to procrastinate. You can do all the research in a very short period of time if you're motivated. If you want to be in the Real Estate Investing Business, then study hard and get started.

    Good Luick,

  • Member since 2008 · 1 post · 0 votes
    19y

    As this is my first post, I'll introduce myself. I'm Justin, 21 years old from McCordsville (just South of Fishers, IN).

    Now, I'm aching to do my first deal. I have read through many posts on the forum over the last couple of weeks. Read as many blogs on TREA as I could find. Have a strategy in mind for my first deal, and even what I consider to be an idle first property. My problem lies in the fact that I am a detail oriented person and never take a step without knowing my plan as well as at least one contingency. If I could see step by step the route I need to take (or at least all the "ingredients" like securing finances, tenants, and getting proper documentation) I'd be much more comfortable taking my first step. Perhaps there is a post or sticky I overlooked containing this information. I'd love to pay to become a lifetime member of the TREA site and utilize all the tools and browse around learning for myself... I really believe that site will at least help me do a deal as a locator. However, I can't afford to... literally. If I had a mentor to guide me, as another poster said, the confidence would be there.

    What would you recommend I do?

  • Member since 2008 · 249 posts · 6 votes
    19y

    Justin, I'd love to see what I can do to help you. I'm here in Indy and work with a lot of new investors. We should do some talking and I'll see who I can hook you up with to get things started and how I can help. Shoot me an email and we'll try to find a time to meet up.

  • Member since 2008 · 141 posts · 1 vote
    19y

    Yeah, it's scary. Especially if you have a family that counts on you. But, I knew what I wanted. The wife and I scraped together about $11k. I went into about 100+ houses making who knows how many offers, and finally got one. Rehabbed it with a lot of help from my father-in-law. And actually would have come out pretty good (probably about $15k to $20k profit). But, then my *** ended up here in Baghdad, and that damn property is still sitting with a for sale sign. I actually had a contract signed within the week I put it on the market -for full asking price. Jerk decided 3 days before closing that I needed to make him a substantial deal, so I told him to stick it. He knew I was at Ft Dix, prepping to leave, and he thought he could take advantage. I'll eat that house stud by stud before he gets over on me! Anyways, I'll end up losing money on holding costs, but I'll still get a decent check when it sells. With a long term capital gains rate savings, plus some decent deductions, I might still do OK. Regardless, no matter how much I lose overall, I'll still end up with a check for around $20k to $25k. Which is going immediately into the next house (probably within a week of getting back home).
    I won't gamble money that my family needs for the necessities, but the money I'm using should go to paying off bills and filling an IRA. However, I decided that this is my future financial security, and it's do or die.
    You're going to have to lay some money on the table, and you have to accept that you might lose it. Don't lay money that's supposed to buy groceries and pay for rent. If you lose it, it'll hurt, but it shouldn't get you evicted. Do your due dilligence.
    And no I didn't have a mentor. I really thought I needed one, but I ended up getting everything I needed from books and people on this site (whether they knew it or not).

    Now shut the hell up and move out!

  • Member since 2008 · 15 posts · 0 votes
    19y

    I agree - I just do it and not think of all the risk and why it will not work - even though I have not yet to purchase a property I ahve been looking at property currently I have viewed 21+ properties with 3 good deals - hopefully soon I will close on one - just need more advice and ideas and what to look for - even though I know there will be risk I know that I walk into the deal knowing there is going to be risk

  • Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
    19y

    With all due respect - that's crazy! Of course you should consider the risk. Moreover, if you know what you're doing there should be almost NO risk. I will be making an offer on a property in about an hour. The property is worth $45K (I KNOW the values in my area) and I will offer $18,000. The seller is desperate. I know that I can rent the property for $500 per month. The risk in this deal is almost non-existent.

    I'm running a business, not gambling. When you do a deal, there should be VERY LITTLE RISK. Otherwise, it might be smarter to just buy lottery tickets.

    Good Luck,

  • Member since 2008 · 249 posts · 6 votes
    19y

    I agree, Mike. I don't know if we're misunderstanding you or not, ianternet, but considering the risk is essential to evaluating the deal. I'm guessing that you're saying you don't allow yourself to think very long about the risks involved so as to stop you from doing the deal, which makes sense and can be a good thing. But, you have to think about the risks involved to ensure you have exit strategies in place, have enough money put away, are capable of handling major issues and/or have someone to help who does know how to deal with them.

    As Mike said, the risk is there, but once the research is done and the deal has been weighed in the balances, good deals don't have nearly the risk involved because we've planned for it. It's all about knowing the difference and making a decision.

  • Member since 2008 · 1 post · 0 votes
    19y

    I AGREE THAT MAKING THAT FIRST LEAP IS HARD. I AM NEW TO THIS SITE BUT MAN IS THERE A BUNCH OF STUFF HERE. ANYWAY MY NAME IS MICAH I'M 33 AND AM LOOKING TO MAKE MY FIRST DEAL. IM NERVOUS AND HAVE A FAMILY TO TAKE CARE OF. I WAS WONDERING IF ANYBODY COULD GIVE ME SOME ADVICE ON FIANCING, AND TAX ADVANTAGES. IM CURRENTLY LOOKING AT A COUPLE OF DEALS ONE IS SINGLE FAMILY HOME IN MY NEIGHBORHOOD AND ANOTHER IS A 4 PLEX THAT HAS BEEN ON THE MARKET FOR 18 MONTHS. IF THERE IS ANYBODY IN THE DETROIT AREA THAT MIGHT BE ABLE TO COACH ME THROUGH MY FIRST PROPERTY I WOULD BE FOREVER GREATFULL.
    THANK YOU
    FALCON

  • Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
    19y

    mfalcon,

    You don't need coaching, you need to understand the facts. First, decide on a strategy. Are you going to buy and hold or buy and sell. Then, study and research until you understand how it works. Join your local REIA and become friends with the SUCCESSFUL INVESTORS. Learn your market so that you KNOW property values in your target investment area. Go look at 50 or 100 houses (inside and out). Develop a basic business plan to take you from where you are now to where you want to be in the next 5 years. Learn about basic business principles. The number one killer of all new businesses is the lack of cash flow. You should become an expert on that subject.

    If you are willing to work very hard, all of this could be done in 2-4 weeks. REI is hard work. Your results will be directly proportional to the work that you put in.

    Good Luck,

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