What did you do to avoide analysis paralysis?

Question

This question has three parts:

1. How long did it take you to acquire your first property after beginning your education phase?

2. What gave you the confidence to pull the trigger?

3. How would you recommend newbies shorten the time between education and deal #1?

These are some of my favorite questions to ask guests we have on our podcast as they usually open up a great discussion. I’m excited to read your responses!

Brad Jacobson · Answer

Hey @Hayden Wright, you've got this!

1. I purchased my first within a few months of reading Rich Dad Poor Dad.

2. I was convinced it needed to happen, even if the deal wasn't incredible.  For me it was a house-hack and ANY house-hack is better than nothing.  Dividing your housing costs in any way is always a win.

3. Make yourself a "12 Week Goal" today.  If you haven't read the book "12 Week Year" do it, and starting today, give yourself the goal to finish the book and own a property in 12 weeks.  Start today by talking to a lender. Continue tomorrow by calling two agents.  Finally, make you first two offers by the end of 30 days.

3a. If you run into hiccups with financing, pre-approval, other things, you'll have to adjust your goal.  However, if you're continuing to call different lenders and different agents, you're going to meet very smart and creative people that can make a purchase happen in almost any scenario.

Good luck and let us now your success!

Jonathan Greene · Answer

The #1 reason that new investors stay stuck in analysis paralysis is that they aren't seeing any or enough properties to understand what all the numbers mean that they keep crunching at home on their computer. Finding an investor-friendly agent who also invests is key because then you can tag along as they look and they are less likely to be annoyed looking at fixer properties. Almost every time someone says they are stuck and I ask how many deals they have seen in person, it's almost always zero. You don't know what the numbers on the calculators mean until you see 100k, 200k, 300k in real life in your own or target market.

Brandon Vukelich · Answer

Accept the fact that you won't likely hit a homerun on your first, second or even third deal but you will gain massive education through effective action.  I'm assuming you're looking at SF or 2-4 unit MF, not 100+ unit communities or something.  You sound like you've been analyzing deals, so you have experience running numbers or using tools.  You'll find it isn't rocket science on the small ones.  Verify income and expenses, what your financing terms will be, where are market rents, etc.  If the numbers work, submit an offer.  I have clients that have watched the market since 2016 and have missed out on hundreds of thousands (if not millions) of dollars in equity growth.  They always felt the market was too hot and stuck in their analysis mode.

1. How long did it take you to acquire your first property after beginning your education phase? - Less than 3 months.

2. What gave you the confidence to pull the trigger? - I knew that you can never "time" the market perfectly. Snooze you lose.  Markets will fluctuate but who cares if you're planning to hold long term.  If not, be more conservative in your analysis.

3. How would you recommend newbies shorten the time between education and deal #1? - Pull the trigger and submit an offer.  Even if you back out via a contingency.  Just get familiar with the process and understand that some deals will be dogs while others will end up being stellar opportunities.  Nobody bats a 1000 and that's ok.

Best wishes in your journey.

Janet Behm · Answer

Question 1. It’s been so long ago, and so many properties come and gone. But every purchase started with a plan.

a.  What are the criteria for taking a deal?

1. Pre-qualify for lending

2. Have a home inspector ready

3. A screamin’ deal probably has something that isn’t being disclosed

b. Location (do I really need to repeat this?)

c. ‘Passive’ income is the result of buy & hold. Will it rent…if trouble arrives will it sell?

Question 2. Set up criteria of what the property MUST have for it to be “trigger pullin’ worthy”

a. This could be a simple as three-bedroom, two-bath, off street parking

b. If it “ticks” the boxes, make an offer (an offer is not a contract to purchase)

Question 3. Shorten the education to deal path with repetition (do I really need to repeat this?)

a. Determine to make an offer every week. Poise comes with experience.

b. The final test is to close on an offer

c. Now you are part of the landed aristocracy.

Congratulations! I knew you could do it.

Justin Sullivan · Answer

I knew I would invest since I was like 15 years old. I got into some trouble in my young adult life which hindered me but as soon as that was cleared up I started investing immediately.

I am a jump and build the parachute on the way down type of person so I didn't struggle with the confidence. I did worry about it not selling for some reason and being stuck with it so I made sure it would work as a rental as well for the first one.

As for education, information isn't the issue in this day and age. You can literally find contradicting view points on the same subject back by research in a matter of minutes of each other. Look up coffee is good for you, then coffee is bad for you. Every year a new study comes out. Drink 4 cups, drink one, drink none, drink 2. So my best advice on the education piece is two things. First is learn by doing. Find a deal and jump in blind with partners or yourself but learn by doing. I love to learn along the way. This is risky so be weary of this option. Second option, in my opinion, is the get clear criteria on what method you want like, single family brrr under 300K with carpet and paint renovations. That way whatever knew information you take it is just that information but you stick to your criteria until your seasoned. Another thing is just to read the basics and get started so you don't overload on information and keep switching criteria. Everyone is ADD today because everything is so accessible. Just pick something and stick to it.

Scott Krone · Answer

@Hayden Wright  This may not be the answer you are looking for or expect, but I have found it to be an incredible tool.  When asked this, I suggest reading "The Road Back to You" by Ian Morgan Krohn.  It is a book which helps people understand themselves better through the use of a tool called the ennegram.  The type known as a Investigator (also known as a 5) commonly experiences "analysis paralysis".  The trait is to be driven by data to insure a full understanding of all the facts before proceeding.  The under current driver is fear of being wrong.  An example of this:  my father in law was a 5.  Incredibly thorough and prepared man.  He studied stock options for over 30 years.  He attended many seminars, weekend conferences, read many books, knew all the strategies, and could explain the market.  Yet, during those 30 years, he never made one trade.  I even attended a conference with him, and joint opened an account with him, yet there was always something prohibiting him from moving past learning and into the world of doing.

Analysis by paralysis is an unhealthy 5.  The book helps each of us to better understand when we are healthy or unhealthy in our type.  By recognizing and addressing the cause we can move away from the fear and into a better place.  From my perspective, all the tools and resources will never address the block.  It first begins with addressing the fear.

Alecia Loveless · Answer

@Hayden Wright I jumped right in when I was in my early 20s but ended up having two bad experiences which knocked me out of investing for about 20 years. I ended up getting back in through some house hacking that turned out really well and just told myself, “this is easy, this can fund retirement. Jump in now, there’s still some really good buys to be had!”  That was about 2 years ago and I haven’t looked back. I’ve gone from owning a bed and breakfast with an ADU which I sold to having 15 doors and growing.

I’d recommend establishing your “WHY” and moving firmly forward on one deal and building up from there.

Peter Nikic · Answer

Unfrtunately it's real for too many people. I was lucky in that I was a little more bold and daring than the average person.

Do your research, and if it seems good, just go for it, don't stall or wait. The more you stall and the more people you seek advice from, the more likely you will back out or take too long to decide until the allure fizzes out.

Wesley B Williams · Answer

Hey @Hayden Wright, great question and a subject that plagued me!

1.) I was in analysis paralysis for 6-7 YEARS! I listened and learned and came up with excuses not to invest yet, thousands and thousands of excuses...not enough money, markets too high, not the right time, what if this happens what if that happens, etc, etc...

2.)I was fortunate enough to marry a women who got sick and tired of hearing how great real estate was from someone who never bought any real estate(outside of primary home) and wasn't afraid to tell me...within a week of her telling me and coincidentally talking with another investor who said sometimes you just have to do it, I had bought my first rental property.

3.)Have a goal and set a timeline of how long you can just educate before you have to take true action steps, write down your action steps, and have an accountability partner you talk to specifically about this goal at least once a week. timeline should be 1-3 months.

Bruce Woodruff · Answer

@Dave G. and @Spencer Gray have it right. A lot of newbies over-analyze this terribly. This is not that hard really.....it is made to seem difficult by the huge amount of money involved and the high risk of failure  - if you fail.

Ask yourself these questions: 1) How many people do you know or know of that have bought Real Estate? Hundreds, right? 2) How many of these people failed, i.e., lost the properties or lost their money? Probably none...or one?

So stop trying to figure this out. Go buy a property that works for you - simple math is all it is. Thinking on it , I am not sure if I ever knew anyone to analyze a deal all that much...scribble some numbers on a cocktail napkin while knocking back a single malt, make an offer, or don't. Done.

What did you do to avoide analysis paralysis?

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