What's your Challenges and Obstacles?

Question

I know we beat the horse to death in the last post,

https://www.biggerpockets.com/forums/756/topics/788980-lets-beat-this-dead-horse

Lot of you shared about what's stopping them take their next step or start investing. Let's talk about them one by one and see how we can help address and show the way..

First complaint, I always hear... I don't see great deals out there. I have stay to you them, you are not looking at the right places and all the places. Are you sure to leave no stones unturned?? Deals out there and I make them to work me and my investors and others do as well. You need to look for it...

Let's talk more about your challenges and obstacles...

Ralph Justiz · Answer

@Vijaianand Thirunageswaram my biggest obstacle right now is financing. Since leaving W2 life and going full time into real estate banks have decided they do not like me anymore. I am a buy and hold investor and I feel as if commercial notes and hard money is often too expensive for the properties I am looking at. Again that is just my opinion. I struggle with the idea of not pursuing further investments because of my current situation versus sucking it up and just picking up deals that cash flow less because some cash flow is better than none.

Chris Hopper · Answer

@Ralph Justiz There's plenty of loans available to you.  I do all asset based financing for my rentals.  75%, 30yr fixed, 5.5-6%.  Yes, a little higher than Fannie, but well worth not having to jump through all the hoops for Fannie loans to save a point.  Plus since you can only have 10 Fannie's it's not really a big deal to me at all.  That shouldn't be an obstacle to keep you from buying more properties.

Ralph Justiz · Answer

@Michael Barry I've found that networking has completely changed my life. I was and still am the guy that hates to leave the house and talk to new people. I cannot stress how uncomfortable it was for me at first but now It has impacted me in such a way that I make an effort to network at least twice throughout the work week and once on the weekends. I've found a mentor, contractors, wholesalers, CPAs, clients, friends, etc.. just from plugging into the local community. It is still hard for me to talk to new people but in the end I know it will benefit me tremendously. Seriously, if your not going to local meetups you're doing yourself a disservice.

Ryan Johnson · Answer

@Ralph Justiz I hear you on wanting to leave the W-2. I think about éxiting healthcare every minute of my life as hospital work can be atrocious regardless of the high pay. But I’ll stick with it until I can exit on my terms with more cash flow coming in. Until then I’ll bear the misery LOL.

Kiera Underwood · Answer

@Ralph Justiz I'd talk to The Hines Team at Cornerstone. They might be able to make a case for your past work being similar to what you do now and get you approved. There are some workarounds!

Vijaianand Thirunageswaram · Answer

@Ralph Justiz As @Tony Castronovo said W2 incoming is blessing for our skill set we acquired from our hard earned degree/education. If we can hang on to it, it surely helps in all aspects because our financial system is based on paycheck. You need paycheck to get credit, insurance etc.,  What Robert Kioysaki mentioned about getting out of Rat race won't fit in this android era where you can work from anywhere and anytime in certain jobs.. That really helps new generation. I am hanging to my W2 at this point while I am slowly building my other venture. I do have Brokerage with few agents and also Flip/Rehab Company and New construction LLC. I just able to get approval for commercial loan using my 2 year return from these companies I been building for 2 years now. I feel that I am on the right path to continue and grow... I been tempted many times to leave but for now I am hanging on tight and milk it as much i can.  It's unfortunate you couldn't do it for more longer time but still it's end of world.

Once you get your other business taxes filed for 2 years and you can start using them for your investments and there are other financial opportunities which @Chris Hopper mentioned. With interest rate 5-6% still not bad deal compared to 9-10%. I would encourage you to chug along and you will continue to tackle more and get to zone for smooth sailing soon...

Marija Sparano · Answer

@Ralph Justiz I agree with you! How many properties do you currently own and what is your short/long term goal? Also, have you ever thought about partnering with someone? That might be a good option in your situation.

Ralph Justiz · Answer

@Tony Castronovo It sounds like you're crushing it. I am about half way to FI. I got burnt out at work (long hours, working weekends without pay, boss was a ****) so I asked for lessened responsibilities or a raise and that didn't work for the company. My wife is a successful realtor so I decided to join her team. The only two issues I have with going full time in RE is finding affordable health insurance and traditional bank financing is at least another year out before I can qualify for it. Otherwise quality of life has improved dramatically. Thanks for engaging in the conversation.

Tony Castronovo · Answer

@Ralph Justiz I am curious if you left the W2 because you reached that "financial freedom" threshold we all talk about...or if you just burned the boats and went all in on being a real estate entrepreneur.

I have a good paying W2 and lenders like me.  I do consider if that would change (or how much it would change) once I no longer had the W2.  I've managed so far to balance a demanding job with my two multifamily properties (as well as family, marathon training, ongoing education, and a modest social life).  I'm just ready to go all in on real estate and think I could grow my business much faster.  Just know it could be a detriment to drop the W2.

Curious how your decision-making process went.

Michael Barry · Answer

For me, networking has been a challenge (busy with day job, young family and introverted).  Recently, I have connected with a friend who is an investor and is interested in partnering on some deals. I will be meeting some other investors in my neighborhood that I found through our neighborhood Facebook page by chance.  A neighbor posted a STVR she owns on the page and I just reached out and asked if she would be willing to chat about her experience.  Then another person with investment property joined the conversation. So I have two informal meetups with people in my neighborhood who invest and a good friend with experience who is interested in partnering up. So I feel like I’m making progress on that front.

I’ve linked up with a few lenders to get the ball rolling  on that front. Working on pre-qualification so I can really start shopping.

I’ve been talking with a few realtors/brokers as well and have started getting some traffic with off-market deals.

My next challenge is finding a few solid contractors.  We had some quotes on some jobs at our primary residence with contractors we’ve used in the past but the prices are Way too high for a profit-driven rehab. Perhaps they focus on homeowner retail type jobs and charge a premium and I need to find different contractors who are more reasonable. I’ve thought about offering to pay for a good GC to walk a property or two with me and we go step-by-step through scope of work and costs. Seems like a good way to interview the GC before awarding thousands of dollars of work, and learning what to look for and how to price jobs out.

What's your Challenges and Obstacles?

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