What is the biggest thing holding you back from getting started in today's market?

Question

If you've been wanting to dive into real estate investing but haven't taken the leap yet, we want to hear from you! What's the biggest thing holding you back from getting started in today's market?

Share your thoughts in the replies below and let's help each other overcome those barriers! 💪

Mike Klarman · Answer

You know, I always think that is very misleading when they charge thousands of dollars to newcomers base off marketing that boasts getting into real estate with no money down.

These deals cost money.  There's down payments, closing costs, and then holding costs, plus miscellaneous costs.  Projects have life cycles.  Hopefully 4 months.  You close, you rehab for 8 weeks, under contract in three weeks to sell, and close on sale at the end of month 4.  The project life cycle to the end will cost at least 22k or more, even on small deals of purchases prices under 100k.  There's lots of fronting money and getting reimbursed that goes on during fix and flips so you need to be liquid.  And you want your net return to be 80% - 100% of invested capital.  So if the lifecycle costs 30k, you want to net at least 24k at the end, etc.  Once the bones of the network are established then it's a matter of repetition.

CAN you do it with no money down?  Sure.  You can have family money.  A rich parent or sibling that believes in your RE vision.  Can you get 100% from a lender?  No.  10% - 20% (depending in various criteria) will need to be supplied.  Can you start a fund where people provide you capital and in return you guarantee them a yearly APR in return and provide monthly interest payments.  For example, you can tell an investor to invest 100k with you at 10% per year.  That's 10k in interest per year.  10k/12 is $833/month.  You pay the investor 833 every month while you hold the 100k and in return this 100k sits in your bank account.  Do these private deals exist?  Maybe...?  I never was in one that's all I can say.

Mickayla Fatovic · Answer

Every time I find a good deal - it ends up being not so good once I start analyzing the numbers and the reality of the home or environment lol. I think being in property management and maintenance my experience keeps me at bay for about 99% of properties I review.... I immediately see repair, permit, and maintenance issues. Then when I find a property that doesn't have too many repair, maintenance, or permit issues - the numbers don't work out or the sellers won't work with us to find a middle ground. Near me it's becoming a buyers' market, so I am eager for the full-shift and reality that comes with that. I'm ready to buy and close, but I'm not desperate to jump on any deal that is thrown at me. Especially not with the declining market by me.

Bradley Buxton · Answer

Cash. Everyone wants cashflow and you need more cash down to cashflow.

Euniqua Cobbin · Answer

The biggest thing holding me back from getting started is me feeling like i need more guidance. I have no family or friends that expertise in the field that could possibly guide and or help me through the journey and im not financially equipped to pay for a good mentor. so, meanwhile, i just research and plan....

Eric DeNardo · Answer

Finding deals. Takes patience and persistence.

Andrew Yanni · Answer

Simply just finding good deals has been the toughest thing especially in my market (CA) where labor costs and home costs are now through the roof and every seller/wholesaler has priced their home with little to no profit for the end investor. Unless I'm looking for a long term buy and hold the fix and flip market is getting squeezed out pretty bad in my market. There are always those gems though and I'm on the lookout for one!

Mike Reynolds · Answer

Finding deals here. But I did put one under contract just last Friday.

Ade Solanke · Answer

Sadly, it's the reality of the real estate bizness.  All the gurus & mentors tell you that you can do real estate with no money or credit, except, of course, for the money you have to pay them to learn plenty you could easily find for free online or just thru the School of Hard Knocks.  Trick that I am learning:  work on overcoming your fears, pull leads, get on the phone, talk to sellers, local brokers, other investors, other RE partners, etc.  Speak simply and naturally.  Tell Mr. Jones or Ms. Smith that you are a local real estate investor, and offer to pay cash for their property.  Be transparent, decent, and honest.  Anything shady could become a habit, and potentially land you in trouble.  Contrary to what you've been told, there's no magic or secret to it.  Folks in RE are generally nice helpful, hustling to change their lives for the better.  Another trick is to be consistent.  You can't give up even after days/months of not producing results, which is highly unlikely.  Good luck, -from Chicagoland

Brendan Davis · Answer

Cash: Main problem right now especially trying to make a backyard deal. My area is not interested in seller financing, they all want their equity right now and I totally get that. Also finding out that you might as well not waste your time calling hard money lenders when starting out because they want to see a couple properties you currently have. It's a struggle starting out and I don't think it's talked about enough in more of a blunt way, in blog posts or any article on the web, everyone seems to softly speak about the introduction part that requires money.

Melita Pena · Answer

no confidence I need some guidance I don’t  know where to start. can some one help me become financially free pleaseeeeeee

What is the biggest thing holding you back from getting started in today's market?

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