QOTW: How long did it take you to purchase your first investment?

[Alicia Marks]

Welcome to our question of the week! Based on last week's responses, we have a lot of lurkers that have not purchased their first property. Buying the first, or even second and third can feel pretty nerve wracking. Sometimes we've heard it called "analysis paralysis". How long did you learn the ropes before making your first purchase? If you haven't purchased, what's the key factor holding you back? For those that have been doing this awhile, what was that next step that you hesitated on?

Let's talk about what's holding us back! Make sure to vote in our poll as well!

[Erik Browning]

My first purchase was by accident. 
It was 2008, I was 21, and heard about the financial crisis everywhere on the news and that home prices were significantly dropping. As a young Marine stationed in San Diego, I knew that the VA loan was eligible to me and that it's a good thing to "buy low, sell high" - and that's what I did. Although I had to live in the home for at least 1 year as a primary residence, I had every intention of renting it out once I left. I had next to no money (again, 21 on a military salary) and leveraged the 0% down loan to acquire the property. It was an approved short sale and the seller made every single repair listed on the inspection. Additionally, I renovated the back yard, replaced the flooring, and installed a new toilet. From there, I house hacked a bedroom with a tenant (didn't know it was called that back then) and eventually departed the residence after 2 years or so and rented the entire home out to an active duty Navy couple.

The entire process opened my eyes to the power of real estate, even though I had no idea what I was really doing. Lol, I didn't even file the taxes correctly and self managed with the Navy couple - they had lots of issues but paid on time (thanks to the military's direct deposit to 3rd parties on their paychecks - called "allotments"). It was eye opening, cash flowed a couple hundred bucks a month, and appreciated substantially as the market recovered. Even though the entire transaction wasn't pretty, it changed the course of my life.

My advice? You don't need to learn all the ropes: make some mistakes, jump in, learn along the way, and get bit by the bug. Purchase at an opportunistic time and a deal that makes at least "some" sense. Also, make the mistakes when you are young - you won't get that time back and you can recover from any mistakes as you age. 

There are STILL deals to be had and since I've transitioned full time into real estate lending, I have investor clients that are buying DESPITE the higher rates, DESPITE the looming recession, and DESPITE higher purchase prices that actually make sense in today's market. 

Learn what you can and jump in sooner rather than later. Run some purchase scenarios and see what you can swing - good luck everyone!