Real Estate Agent · Pompano Beach, FL · Member since 2015 · 249 posts · 73 votes
I always hear this figure and wonder to myself how come? Is it because people are scared or is it because the people who are trying to get into investing have a hard time figuring out what information is correct and whats not. I mean there are tons of websites and gurus out there that want a newbie to just pay a certain amount of money so they can eventually be lead down the road to untold riches. Of course more that half of these online companies are on ripoff.com or have negative ratings. So i am starting to think that yea that figure is high, but i really think most of it isn't from paralyzation through analysis, but more of weeding out scam after scam
Atlanta, GA · Member since 2014 · 240 posts · 130 votes
11y
Josh here! I'm a newer investor in my first year of buy/hold real estate. I will never forget the feelings of worry, angst, and sleeplessness that would not leave me alone as I headed toward the closing table for the first time. With just that one property under my belt, the second acquisition felt so much more businesslike, more calculated -- and I was calm the whole way through.
I will also never forget the feelings I had after closing that first deal. The world kept spinning, I didn't lose my shirt, and I drove on home with the strange, anti-climactic feeling of 'did that really just happen?'
Yes it did, and I'm so glad I fought through the emotional waves, making the scary unknown into a new, exciting venture.
Atlanta, GA · Member since 2014 · 240 posts · 130 votes
11y
Josh here! I'm a newer investor in my first year of buy/hold real estate. I will never forget the feelings of worry, angst, and sleeplessness that would not leave me alone as I headed toward the closing table for the first time. With just that one property under my belt, the second acquisition felt so much more businesslike, more calculated -- and I was calm the whole way through.
I will also never forget the feelings I had after closing that first deal. The world kept spinning, I didn't lose my shirt, and I drove on home with the strange, anti-climactic feeling of 'did that really just happen?'
Yes it did, and I'm so glad I fought through the emotional waves, making the scary unknown into a new, exciting venture.
Entrepreneur · Miami, FL · Member since 2013 · 133 posts · 83 votes
11y
For both and more reasons (not sure about the 90% though). Others feel that they need more information, others feel they need more money, others feel they need to read more books, other feel they need to quit their jobs, others feel they need to move and live in a different area. Others feel they need to hire a guru while others feel they need to pay for a seminar, meeting, meetup, conference, etc. It has little to do about real estate but more about their inner doubts and failure to take action. It is more about character and self determination than inner "stories" that would almost never materialize...
lol! Yes, I totally relate to what you said about the anti-climatic feeling of closing that first deal. At least right there at the table. The excited "I just achieved a goal" feeling did come a little later when we were toasting with a great drink that evening.
Investor · Gaithersburg, MD · Member since 2013 · 659 posts · 441 votes
11y
I think 10% doing something is even a high number. It's probably more like 2 or 3% (if that). Spending 10s of thousands of dollars (or more) is just incomprehensible to most people. Most of the people on this site have already gotten over that hump and understand the value that spending the money in real estate can bring you. It's just a matter of doing it. Almost no one here believes in that go to school, get a job, work for 45 years, and retire off interest from your retirement account mantra. We all want more. I went to school, got a job, found real estate, and I'll be retired 20 years earlier than most.
That's why there is only 270k people on this site and not 270 million.
Try going up to 100 people on the street with a normal job and saying "I'm over a million dollars in debt and I couldn't be happier. And btw, I make more money per month than you do and I don't really have to work." 99 of them will look at you like your crazy. It's good though. If EVERYONE did real estate, then it wouldn't be so lucrative for the rest of us. We need that 90% because that's who rents our properties :)
Investor · Antioch, CA · Member since 2014 · 97 posts · 37 votes
11y
People are scared to lose money. It's all about mentality and perspective. The world is taught it's fine to work for a company 40 years plus, and retire broke. Hell who is to say an individual will live long enough to enjoy retirement. Plan, research, find niche, and attack relentlessly.
Investor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
11y
For many people, there's a real fear of either "doing it wrong" or "doing it at the wrong time".
So many people are looking for THE formula and become overwhelmed because there are many, many, many correct ways of doing it. How many times do we see people arguing over the 1% (or 2%) rule. Or the correct way of calculating ROI. Or the correct way to manage the property, deal with tenants, deal with contractors, etc, etc, etc. I can see how it would be completely overwhelming.
There's also a real fear of not getting the best deal. So you left 5000 on the table at closing or $100 month on the table month over month. It's not the end of the world, necessarily, but many people feel that if they can't absolutely maximize each dollar in the most efficient manner, then somehow, they have failed.
And in this day and age, the internet allows the entire world to criticize every decision they've made if they decide to share it for some reason.
The fear can be paralyzing, to be honest. It takes a certain mind set to put all that aside and just do it.
Residential Real Estate Agent · Paterson, NJ · Member since 2013 · 78 posts · 42 votes
11y
I honestly don't know why most people never get started. I have spoken to guys who were interested in investing real estate way before I even started looking for my first deal. 3 years later, those same guys are still looking and I am building my portfolio. Things I tell them I had to go through in order to make the deal happen are some thing they can't imagine doing. I'm talking about taking months after months to close on a deal and having your money tied up; every time you spend a dollar the bank wants to know why and have you write a letter…lol. Some of the risk involved as far as potentially losing money on a deal weather it be a fix and flip or buy and hold. We all have fears but some of us understand that risk are apart of the game and others are too fearful of risk. I also think that some people just like to talk about it because its cool.
That's related to why most people don't invest in RE. Doing stuff on your own outside of a regular job and paycheck is scary for most people. Scary enough that they will always opt for the 'security' of a 9-5 job with a direct deposit of X amount every 14 days.
It's a lot easier to bXtXX and moan about your 9-5 than it is to do anything about changing your 9-5. Much easier than scraping together 10 or 20 or 100k or whatever to invest.
People who invest in RE are entrepreneurs and generally like the whole risk/reward aspect of it.
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
11y
Some people think of it like having a baby. With the first one, you buy all the parenting books and read them cover to cover to see what other people are doing and how to do things the "right" way. You get the perfect baby clothes, the perfect diapers, research and buy the perfect food, videotape every second of the baby's life.
By the third or the fourth, you're just lucky no one has stepped on him/her and the baby is at least partially clothed and is getting food and water.
Try going up to 100 people on the street with a normal job and saying "I'm over a million dollars in debt and I couldn't be happier. And btw, I make more money per month than you do and I don't really have to work." 99 of them will look at you like your crazy. It's good though. If EVERYONE did real estate, then it wouldn't be so lucrative for the rest of us. We need that 90% because that's who rents our properties :)
Great way to put it.Simple disciplines done everyday in rei compound to much over time.
Real Estate Agent · Tampa, FL · Member since 2009 · 456 posts · 123 votes
11y
Guys, let's be honest. 90% of people don't end up doing it because they can't put together the capital and/or credit and no one will loan them the money to fund a deal.
If it was easy, everyone would do it, profit would approach zero, and we'd all have to go find some other way to make money.
Remember this when you're advocating hard for easier loan qualifications and no money down deals, etc... don't bite the entry barrier that feeds you.
Investor · Boise, ID · Member since 2011 · 1k+ posts · 736 votes
11y
Pulling the trigger on the first one is the hardest by far. (Just ask my very patient real estate agent at the time.) The first deal will most likely be far from perfect. However, if you have steady income from other sources, the home cash flows, and is in an area you know and believe in...I believe the best way to learn is to just do it anyway . I need to learn by doing, not just studying.
Pulling the trigger on the first one is the hardest by far. (Just ask my very patient real estate agent at the time.) The first deal will most likely be far from perfect. However, if you have steady income from other sources, the home cash flows, and is in an area you know and believe in...I believe the best way to learn is to just do it anyway . I need to learn by doing, not just studying.
You are sooo right. I have had that very problem so far. But I think for me especially its more of the acquiring of the finance that keeps me stuck. I have a great credit score with about 7% debt to credit ratio but picking the proper finance method to acquire properties keeps me from pulling the preverbial trigger :(
Contractor · Chicago, IL · Member since 2015 · 27 posts · 12 votes
11y
In my opinion I think a lot of it comes down to comfort. Sitting in your home and reading about other people's successes and failures. The reason I say this is because just last year I made the decision to buy my first SFH at the age of 23 and I didn't know much about real estate and definitely didn't know of BP. So I didn't have all the resources I do today I just went out and got an agent and start looking for houses and went with my gut and bought a turnkey SFH that I rented out 2 weeks after closing and brings me a profit of $500 a month after expenses. Even when everyone was telling me not to do it.
After learning about biggerpockets I started reading a lot and I noticed the more I read the harder it was for me to take the next step. I had a clear plan of what my next step would be but I got caught up in the threads of what's right and what's wrong. I'm not saying educating yourself is bad and sure you can say I probably got lucky with my first property but I'm glad I did it because it worked out great and I think I just need to go back to my plan and execute it
So in my opinion I think people get scared on here thinking that their way is wrong. And you gotta follow the most successful investors to get it right otherwise you will fail. There is more than one right way you just gotta get out there and do what you believe is the right way for your situation
Huntsville, AL · Member since 2015 · 17 posts · 19 votes
11y
Corey Demuth you hit the nail on the head. Trying to get that first property is daunting when you are starting from zero. Do you spend thousands to fix your credit with pay offs and buying trade lines Or do you say the hell with credit and sock away the cash until you can buy outright? All of these options will make it seem like it will take FOREVER. Within the 10% there is 2% that say I know it will be like building a house with pebbles but I gotta have that house. So pebbles it is!
Real Estate Agent · Tampa, FL · Member since 2009 · 456 posts · 123 votes
11y
@DeniseFord Personally I don't believe in reneging on debt. I would pay everything off including the fees. Some/many will disagree but I think it's a short-term view - but trust me, if you start getting on bank's blacklists you may never get off of them. Regardless of the 5 or 7 year limit for bad info to stay on your credit report, some banks still maintain their own private records forever. Also if you don't pay it off, eventually you will get hit with a tax bill for however much debt the bank writes off.
Wholesaler · Buford, GA · Member since 2014 · 119 posts · 15 votes
11y
It's easy to get complacent and remain under the protection of your security blanket. Entrepreneurs and dreamers want more than a 40 hour 9-5 salary job. We're in the minority, not the majority. It takes a special kind of person to put in the work and dedication that it takes to be successful. The weak mined and lazy get weeded out pretty quickly and leaves the ones that are dedicated and determined. It's all about staying consistent and doing, and you will get there.
Professional · Boise, ID · Member since 2014 · 88 posts · 29 votes
11y
When you have a 9-5 job, its easy to blame your boss for things like not getting paid enough, long hours, etc..etc. When you are an entrepreneur and things go wrong you only have yourself to blame, and I feel that is a hard pill to swallow for alot of people.
I always hear this figure and wonder to myself how come?
In my opinion, it's about money.
So many people are completely undisciplined when it comes to money, I'm not great at times. But then, I also have a ferocious tight fisted gene.
This is true; on Sunday I trawled through Wal*mart looking for something to buy. Budget say $100, lets not get ahead of myself. I looked at everything (everything less than $100 that is). Ended up spending $5 for two toys for the dogs (who proceeded to kill them in less than an hour). Despite all the things I could buy and put to good use, couldn't do it.
But so many people out there will have no problems spending the extra $1k they have in their pocket. They "need" that new tv, they "need" that new phone, they must have a new iPad/tablet, etc. They splash out of steaks, a new grill, etc.
And if they win big, they get a new car, etc.
If you earn $100k, you spend $100k.
People cannot break that cycle of spending everything they have.
And despite all these gurus pretending it's easy, this is still a rich man's (and woman) game and it takes money to play this game.
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I do think you're right that some people become paralysed. They see $100k as a lot of money (whether they have it in cash, or whether they can borrow it), and all of a sudden 'this sh*t gets real'. It is a lot of money, but it's also part of the game, it's a high stake game with big money.
And many people just cannot handle that.
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Me personally, the way I got into this game was by putting profits from another business into real estate. Whenever we had a good year, we bought another property in cash. To an extent we still do that but with a different business that has consistently better years.
Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
11y
The great majority of people who consider real estate investing never take any meaningful action.
Head trash is high on the list of real reasons. The would-be investor has so much junk in their heads that there's little room for making a decision and committing to doing their first deal. The truth is, they don't really know that this is happening.
Distractions with shiny objects, technology and social media takes a big toll.
Many feel that talking or posting about doing deals satisfies their desire to actually find and work a deal.
Lack of funds is just a high level excuse because the money will always appear if the deal is right.
My suggestion is to hang out with people who are really doing deals and much less time with the dreamers (although dreaming is important for goal setters).
Immersing yourself in marketing activities and committing yourself to the process. This has the effect of getting to talk directly to principals and sets you apart from those who do not market.