newbie to real estate and discouraged

[Nikki Dupoux St Jean]

So after speaking to tons of lenders and being shot down with the 30% down deposit and 9% interest on a loan that needs to have a minimum cap of 150k, how do I jump this hurdle and find a deal while all I have to put down is 30k? Or do I just sit around and wait for interest rates to go down? This is so discouraging. I keep hearing how everyone is investing but it seems as if all doors are being shut in my face. I thought I could head to purchase a mobile home in Florida with cash, but I've been told by all mobile reps, mobile is not the way to go with rental cash flow due to the lot cost, then I wanted to try Detroit, but all the houses their looks like they have been burnt down. Now I headed to Indiana where I was told to look into Terre Haute, Indianapolis, but lenders want to give me a loan where I get no return and to purchase a property just to sit and wait for it to build value.  at 9% interest nonconventional, so much underlining that will make your head spin by the time you are done talking to one. Is this only me, or are there others out there that had similar issues but overcame this dilemma?

[Randall Alan]

Quote from @Nikki Dupoux St Jean:

So after speaking to tons of lenders and being shot down with the 30% down deposit and 9% interest on a loan that needs to have a minimum cap of 150k, how do I jump this hurdle and find a deal while all I have to put down is 30k? Or do I just sit around and wait for interest rates to go down? This is so discouraging. I keep hearing how everyone is investing but it seems as if all doors are being shut in my face. I thought I could head to purchase a mobile home in Florida with cash, but I've been told by all mobile reps, mobile is not the way to go with rental cash flow due to the lot cost, then I wanted to try Detroit, but all the houses their looks like they have been burnt down. Now I headed to Indiana where I was told to look into Terre Haute, Indianapolis, but lenders want to give me a loan where I get no return and to purchase a property just to sit and wait for it to build value.  at 9% interest nonconventional, so much underlining that will make your head spin by the time you are done talking to one. Is this only me, or are there others out there that had similar issues but overcame this dilemma?

 @Nikki Dupoux St Jean

Hi Nikki,

They say "timing is everything"... and had you started your real estate journey 2 years ago, you would have been writing something like, "I can't believe how amazing real estate is!  I'm cash flowing $500/month on a home I put $30,000 down on!!!" 

Over the past 2 years, however, real estate has more than doubled in value.  Net effect: the cost to buy a property has doubled in price.  In addition, the  Federal Reserve has hiked interest rates upwards of a dozen times in the past year... and will do it a couple more times this year.  Their goal: to slow down the economy and cool down those super high real estate prices.  The net effect for investors: It isn't a good time to try to be getting into real estate right now.  Most purchases would result in minimal positive cash flow, if not negative.

But don't be too discouraged.  You are not alone.  We are pretty much all in the same boat.  I have my money sitting in a high interest savings account just waiting and watching for a deal that makes sense.

Real estate is cyclic... rates will come back down, which will at least start to make real estate investing more achievable.  Until then, we wait. 

All the best!

Randy