First time anxiety or trust my gut?

[Richard Gallagher]

Hey guys, I'm new to real estate investing and am currently seeking out my first deal. I am currently looking at a home that my agent is insisting is a huge opportunity and when we run the numbers they seem to make sense. The problem is my gut doesn't think I can get as much for rent as my agent thinks. It's an old house and I know it'll be a lot of work. How do I know if it's just first time home buying anxiety or if I should trust my gut to keep looking? 

[Matt Nico]

Richard, 2 things:

1. If you trust your agent and you are very confident they are good at what they do, then I would trust them.

2. Your "Gut" is another way of saying your intuition. Intuition is based on your underlying knowledge (in the subconscious), which is then brought to the forefront..... In this case, since you don't have any rentals yet, it would not be wise to listen to your gut, because it doesn't know anything yet.

With that being said, you should definitely be conservative with your numbers. If he is telling you that you can get $2,500 in rent, then assume you can only get $2,300 in rent. If it works at $2,300, then buy it. Also if you are house hacking it, you are only putting 5% down anyway. Thats a pretty low risk move.

Hope this helps,

Matt