Feeling overwhelmed with Analysis Paralysis

Feeling overwhelmed with Analysis Paralysis

Rental Property Investor · MI · Member since 2020 · 11 posts · 1 vote

I think like most folks I've started out excited about the potential of having that extra cash in the pocket in a few years time through REI, but I feel burnt out without even having my first property and I'm finding it harder by the day to find deals that make sense.

Part of the issue is finding where I want the property. My local market and surrounding area is extremely inflated and there is no way to make the numbers work. I’d consider renovating a deal up to two hours drive away, but all neighbour city’s/towns are what I would consider lower income areas with little to no growth or Airbnb potential. This has driven me to consider selling up and moving towns, but this causes additional stress and anxiety as I LOVE where I live in MI. Another option would be to “snowbird” and head south for a few months to renovate and rent, but will be tricky with daycare etc.

Any advice for out of state investing / not getting burnt out / general advice?

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  • Real Estate Agent · Tampa, FL · Member since 2020 · 411 posts · 373 votes
    5y

    In inflated markets (a condition you can gauge by the increasing gap between asking/offer prices and the prices at which homes APPRAISE) profitability tends to shift away from buy-and-holding turn-key properties to favoring the rehab space of investing, flips and BRRRR. This is because those buyers flush with cash who are inflating the market, largely by their flight out of cities that they have long hated living in but had to until the pandemic and the new work from home era, those buyers tend not to be interested in "fixer uppers" but will gravitate toward the turn-key properties in crime-safe (not necessarily class A but crime-safe) areas. What that means is that the inflating of prices is not across the board. When an individual property is distressed and hits the market, it's not going to have those instant 12 offers and bid wars flaring up over them that you will see with those purdy perfect white picket fence Hollywood dream homes in areas with optimal school districts for their kids, etc. Distressed property that sits on the market more than a week or two will make the sellers nervous and they may even lower the price or start to entertain slight lowballs on offers. This is the space where an investor can continue to grow their portfolio even in this market.

    Now, if you don't want to do rehab and I don't blame you because I've found out the hard way in past ventures that I really really suck at carpentry and most things that aren't basic mechanicals like HVAC (I was an aircraft mechanic in a past life so I "get" things you can assemble with bolts better than how to cut wood in a perfectly straight line even with a jig), there are options to have general contractors and specialist subcontractors do the rehab for you.  You'll have to budget extra capital for the work but some deals in A- and B-class areas (crime safe and good school districts) will have high enough ARVs to make it worthwhile.

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