Did I get into investing at a bad time in Wisconsin ?

Question

I am wondering if I have tried to get into real estate investments at a bad time in Wisconsin. All I hear is that there isn't enough housing inventory to keep up with the demand. On top of that, not having the capital to go out and get something is also hurting. I've researched house hacking and BRRR, but we just bought a home 1 yr ago and with a family of 6 some of those ideas are not realistic.

Is wholesaling my best option? Just looking for some guidance. My hunger isn’t stopping, but I want to get feedback from others who may have been down a similar path.

Rebecca Knox · Answer

Every year it's something different....last year it was doom and gloom too.....but I am in Milwaukee and we are currently have the best numbers in our history. Experience correlates with profits too.  Don't focus on the negative.

If you don't have capital, wholesaling is a good option but also, start now with understanding your barriers to financing if there are some---especially credit. Fixing credit is a time game and I think that should be a number one priority for any investor starting out that is planning on being in real estate. Additionally, if you ever want to sell a property in Wisconsin, many people do not understand that delinquent child support, federal taxes and any unsatisfied docketed judgments are going to be an issue. You can buy properties all day long with these issues; it's when you want to sell something that this becomes an issue.  If you have no credit issues, then start calling every HML and investor friendly banks you can find and get their rates and investor programs so you understand what parameters you are working with to analyze your deals correctly and create exit strategies.

Good luck on your REI adventures and wherever you are hearing all this information, maybe stop reading or talking to those people. Our mind is only as good as what we feed it.  It's hard enough to just get started in anything new and having people, who most probably aren't even actively in real estate, feeding your insecurities is not positive purposeful energy.

Scott Schultz · Answer

Its never a "Bad" time to get in, right now its just tougher to find deals. Real Estate is Cool again, like in the early to mid 2000's so everyone is trying to "get in" and everyone with no money is trying to wholesale, when they should get Licensed and sell houses, instead of trying to scam people out of their equity (Im talking about many, not all wholesalers)

If you get licensed and do the marketing a wholesaler does, you can still flip the contract, or if the numbers dont work you can list the home and still get a commission, and along the way you will learn valuation, repair costs and watch deals through other investors (definitely work with investors)  on their dime, see what they do right, and wrong along the way, build  banking, title company, and other industry relationships. Register to do BPO's they dont pay much, but they get you to parts of town you may not otherwise go, and teach you your market values, and when the market tanks again you may be positioned to get REO Listings. Call it part of your education, and you can earn some money along the way.

James De Stefano · Answer

What the... NOT enough housing to keep up with demand?   That sounds like GREAT news for an investor!  It will be tough to get a property, but when you DO GET one, sounds like the chance for high selling price/ rent/ appreciation is likely there!

But what the _______ do I know, i'm 1200 miles South of you.  But was born in Illinois.  Does that count?

GL

Marcus Auerbach · Answer

@Damon James there is a chinese proverb - The best time to plant a tree was 30 years ago. The second best time is today.

Unfortunatley there is not easy answer to your question witha 1-2-3 procedure and boom you are there. If your WHY is strong enough, you will find your way; and it would not surprise me if if you make it work through a bunch of unusual and odd circumstances - you'll hear many of these stories over time.

You have three things to invest: money, time and energy - usually a combination of those three, somtimes only two. If you are lacking one, partner with someone who does not have what you have. You will complement each other. Brandon Turner's book No and Low Money Down will give you a few ideas.

Joel Thompson · Answer

@Damon James consider going to your local REI networking events (REAPS/REIA/BP events/etc.) and finding out what investors are looking for, then go find them deals. You're bound to find some excellent opportunities you want to keep that way, and connecting with other investors could open up JV opportunities or private money.

@Scott Schultz is right on point. Getting licensed is a great way to go, and being a realtor focused on serving investors will take you a long way.

Gary Carver · Answer

@Damon James  yess you should try wholesaling if money is a factor. Talk to as many people as you can. Maybe look into some seller financed deals

Mitch Ferraro · Answer

@Damon James, I can understand where you are coming from. In my experience there is no right or wrong time to hop into real estate. Love @Marcus Auerbach's proverb...the best time to invest in real estate was 30 years ago and the second best time is today. I think there is a huge mindset block with a lot of new investors about not having capital to invest in real estate. Even when you are starting out there is a lot of opportunity to start raising private money for your first deal.

Private money (or also know as Other People's Money - OPM) is different than hard money and different from working with banks. In my opinion, it's the best way to fund your deals and can be done with using little to none of your own capital. I think a lot of newer investors struggle with this because they don't know the best way to approach individuals that could lend to them. If you are finding true deals and you are able to present, correctly, that you have a true deal you can raise the money to fund it. Even if it's your first deal.

There's actually a good Bigger Pockets webinar from 2018 that Matt Faircloth did about raising private money. Here is the link: https://www.facebook.com/BiggerPockets/videos/raising-private-money-to-fund-your-real-estate-deals-live-qa/10155953695419833/

There's a lot that goes into starting out in real estate but one of the biggest things you can do Damon is write out some actionable tasks that you can do on a weekly, monthly, quarterly, and yearly basis. For example, a weekly goal could be calling 5 sellers that you find on FSBO.com. A monthly goal could be to put out 20 offers. A quarterly goal could be to get one deal under contract. A yearly goal could be to make "X" amount of dollars from real estate deals. These are all very basic examples but you should be doing something like this. You should have these goals visible to you on daily basis so you are seeing them and striving for them, every day. Best of luck to you Damon! :)

Gregory Chadwell · Answer

Right now the market is "Red Hot"  I always say the best time to buy is between black Friday and xmas, 2nd best is during "Back to School" season.   You can save at least 10-20 k

Damon James · Answer

@Mitch Ferraro great advice . Thank you

Damon James · Answer

@Marcus Auerbach thank you

Did I get into investing at a bad time in Wisconsin ?

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