I'm a rookie who found a property & overwhelmed by next steps

[Pepper Bradford]

To introduce myself, I've been on this educational journey for about 2 months now, from first reading of Rich Dad Poor Dad in October to joining BP last week. I feel like I'm trying to do it all at once: learning, practicing, researching, putting together deals. In my effort to analyze a "deal a day" I came across an apartment complex of which I'm familiar on the Mississippi Gulf Coast (the area on which I'd like to concentrate). Small multi family is what I'm interested in. I was originally thinking of house hacking a 4-plex, as that seemed the easiest (though it would require me to wait until I'm ready to move to the Gulf Coast). Also I didn't think that I should jump straight into commercial multi family as my first purchase. But then I found a 10 unit (all 2BR, 1BA) in an area that I visit a lot, and have actually seen before. I ran the numbers I could easily obtain through the Rental Property tool and the retuen looks too good to be true, which tells me I don't have the right numbers (or have missing numbers). My main concern is that the property has been on the market for almost a year, and the asking price has been reduced by a third in that time. 

The 2 things holding me back right now are the question of financing, and the fear of wasting people's time. Why go through the process of putting together a deal before I know where I will get financing? Isn't that just wasting everyone's time? Right now I have no money for a down payment, and no idea where to get it. Why would a realtor or broker or even the current owner bother to talk to me if I don't have any money? 

I do understand that right now I'm struggling under the weight of "I don't know what I don't know" mentality. And that I have to start somewhere. But I don't want to torpedo potential future relationships by wasting people's time. 

Any advice? 

Pepper...

[Zachary Ware]

It's great to hear about your journey into real estate investing. Starting with education and joining forums like this is a fantastic step forward. I understand your eagerness to learn, practice, and put together deals, but it's important to strike a balance and take things step by step.

Learning and building relationships are critical parts of the real estate journey. Establishing connections with partners, lenders, and agents early on can have exponential returns down the road. Approach potential partners and professionals with respect, a genuine desire to learn, and an understanding of their time constraints. By being open, transparent, and willing to put in the effort, you're likely to find individuals who are willing to assist and provide guidance.

For this particular deal, it seems that bringing in an experienced investor, preferably someone familiar with the area, could be your best bet. They can provide the necessary experience and knowledge to conduct thorough due diligence on why this deal has been sitting on the market for so long. Additionally, they may be able to contribute the funds needed to make the purchase. Deals of this size often catch the attention of private lenders who are more flexible than traditional banks.

Traditional or agency lenders often have stricter guidelines and may be more focused on larger commercial properties. Private lenders, on the other hand, can be more flexible in their lending criteria and may see the potential in funding a 10-unit apartment complex as it still qualifies as a small multifamily property

Remember, real estate investing often requires creative solutions. Be proactive in seeking out potential partnerships and explore financing options beyond your immediate resources. 

Best of luck with your real estate journey!