Doing it scared vs. doing it stupid

[Emily Simmons]

One of those inspirational FB memes came up in my feed yesterday, and it's basic sentiment was that at some point, you just have to do it scared. Take the leap of faith. And I appreciate that kind of encouragement. But at some point, your fear is actually warning against doing something stupid. So in terms of REI (and especially for beginners who haven't leapt at all), how do you know you're doing it scared and not doing it stupid?

[Marcus Auerbach]

I remember the feeling buying my first investment property in 2008, so you are not the first one to experience this. We all were nervous about buying the first one. What if I screw this up? What if my family laughs at me? 

But the reality is buy & hold is difficult to screw up in a catastrophic way. Between a half way competent agent, inspection, appraisal, title company and insurance your major risks are well mitigated.

Will you make mistakes and screw up small things?

Yes, plenty of them! We all do.

But you adjust as you go and learn from it and then do better next time. You will hire the wrong contractor who does not show up, so you hire a better one.  You will rent to the wrong tenant who leaves the property dirty and grimy, so you'll spend a weekend on your knees cleaning, next time rent to a cleaner tenant.

My biggest advice to keep risks low: don't be super cheap. Don't hire the cheapest contractor, don't by the cheapest water shut off valve, don't hire the cheapest PM. 

And don't buy the cheapest property, that nobody else wanted, just because it was cheap! (That is probably the #1 OOS newbie trap we have in Milwaukee) Make sure you get good value for the price you pay. Middle of the shelf is usually a good place to start.