How to get over analysis paralysis on the first deal!!

[Jamie K.]

Any tips on getting over the initial fear of the first deal would be much appreciated!! I currently made an offer on a single family home in joliet, IL. I've ran the numbers and it should cash flow around $250-$300 per month after all expenses paid. What were your first rentals cashflowing? I know analysis paralysis is normal but how did you stop it from keeping you out of the game? Thanks for any tips!

[Joe Cassandra]

$300 per month after expenses is pretty good cashflow...

Your first deal will always come with the jitters. 

1) Did you buy a deal with equity already built in? 

2) Did you estimate the rehab correctly (yes, your first deal, you'll likely be off by a good bit unless it's already perfect...this is okay)

Likely the thoughts in your head are: 

...what if I can't find a tenant? 

...what if I find a tenant and they destroy the place? 

...what if the house falls apart and becomes a money pit? 

...what if I calculated the numbers wrong and the house is worth less than i thought? 

All of these will likely happen at some point. 

#1. That's okay

#2. Holding real estate gives you a good buffer for errors

FLIPPING is a lot harder...and a much different animal as it's much easier to lose money. 

The worst thing that could happen is you lose a few months of cashflow for extra repairs...but yoru tenant paid down your mortgage, and you got a lot of juicy tax benefits. 

Bottom line...again...congrats on the deal. You have a great buffer with $300/cashflow. 

Worst case scenarios rarely happen...

Buying and holding real estate is VERY FORGIVING (vs other types of investing like flipping/wholesaling)