All Forum Posts by: Alex Gaw

@Wilson Adams I think a big part of convincing our significant other that our goals are realistic and reasonable is taking our time and talking to them as we learn. My wife also had the notion that investing was pretty much the same as gambling. In addition she was used to me talking big and making big plans that I inevitably dropped for the next shiny object. A big part of getting her on board was continuing to talk to her as I educated myself. After several months she had a lot more confidence that 1) I was serious, and 2) I knew what I was talking about, at least enough to get started. She's still a little nervous about the whole thing, because there's a lot at stake and she's had a lifetime of being skeptical of investing, but she listens when I explain and she speaks when she has a concern or doesn't understand something. Now we're working with an agent (whom I met on BP!) to find our first duplex to occupy one side and rent out the other.

It's been a great experience (though slower than I wanted--I had to repair some bad credit and save up some cash) because I didn't really focus on "convincing" her. I just educated myself and talked to her about whatever I was learning or whatever I was really excited about. Not because I was trying to get her on board, just because I was excited and wanted to talk about it! As an aside, my wife and I are both avid dancers (lindy hop and swing), and I was struck by how much what I just described fits with how we talk about good leading. I didn't spend a lot of time worrying about my wife's part, I just focused on doing my part really well and the rest fell into place. Ultimately, if your wife doesn't come around then I'd suggest finding a vehicle you can both get into. Your financial future is important, but it's probably not worth risking your relationship.

Final thought: do a google search for "is investing gambling" and share some of the pages you find with your wife. A key difference between gambling and investing is control.

@Joe Splitrock Thanks for commenting, and I appreciate what you're saying. I offered 2% earnest money instead of the 1% I've been told is standard, hoping that would show I was serious, but I didn't realize how flimsy a pre-qualification letter was or how easy it is for financing to fall through. My 2% earnest doesn't do much to reassure the seller if it's contingent on my financing going through, which is what he's worried about in the first place. And as you say, I haven't got a track record yet. We'll see how it goes, and I really appreciate everybody commenting. I'm glad I asked this question--I've learned a lot from the answers.

@David Dachtera

I looked at the counter again just to make sure. The seller definitely wanted a $2,000 option fee. Meaning if I signed contract, walked in and found that the place was a hellmouth full of asbestos and walked away within the option period I'd be out $2,000. I was much more understanding of the other requests in his more recent counter. And thank you @Guy Gimenez for your input. I'm talking to my bank to see if they can approve within a 12-day window. If so we'll talk to the seller again. If it doesn't work out it doesn't work out and we keep looking, but I'm not a "lines in the sand" kind of guy.

@Guy Gimenez I don't feel like you're busting my chops. I appreciate the opportunity to hear from someone with experience. I'm not trying to avoid risk altogether, I just want it to be balanced. I get that it's a seller's market and he can be choosy with multiple offers, but right now it seems that I'm the only offer.

I hear what you're saying about my confidence being dependent on someone else's time or money, but I still don't understand in this particular situation. If it's a cash flowing property, does the seller still have holding costs? Is there anything other than time that he's risking in taking it off market? If the only thing he's risking is time, is that comparable to me risking money that represents a substantial portion of my down payment?

I hope my questions don't seem bullheaded. I don't just want to get my way, I want to understand both sides because I know I'll be in the seller's position some day and I want my dealings with people to be fair and respectful.

Thanks for the response and the perspective @Guy Gimenez! I understand that the seller wants to reduce risk, and shortening the period seems like a reasonable way to do it. But asking for $2000 option fee or asking the buyer to remove the financing addendum entirely doesn't seem as reasonable. Honestly I wish I'd thought of agreeing to a smaller window. I was trying to think of ways we could meet in the middle but I couldn't think of anything that would allay the seller's fears that seemed reasonable.

I'm confident that my financing would go through just fine, but being out $1800 when I've made every effort to perform just doesn't seem right. Especially as a first timer who plans to occupy one of the units. This is a property that is ostensibly cash flowing. If the deal falls apart because I can't get financing is there risk to the seller other than time and hassle?

By the way, our response was that we gave our best offer in good faith so he could take it or leave it. If the seller is worried about the risk that our financing will fall through that's his business.

My wife and I are finally looking at and making offers on properties after months of learning, hustling for extra money, and working on credit scores. We're looking at small MFs (mostly duplexes) in Austin, Texas to occupy and rent. It's super exciting!

However, we've encountered something that seems weird to me and I'd like the BP take on it. We offered on a property and the seller's counter included a $2,000 option fee. I wasn't sure if it was a real counter or if he was just trying to show his disgust with our offer (which wasn't unreasonable based on the comps and the income, but was $15k lower than list price). So we countered with our highest price but put the option fee back where it was. Then we got a verbal counter saying that we could finish the deal if we agreed to remove the financing contingency and make our earnest money non-refundable.

Is this common? Our agent (who I believe is an investor herself as well as a BP member) seemed as surprised as we were. The seller's story is that it was under contract before, the buyer's financing fell through and they exercised their right under the financing contingency to back out without losing their earnest money. Now the seller is worried it'll happen again and he wants to protect himself. To us it seems unfair to basically punish us for his previous bad luck, and unreasonable that he wants to protect himself from risk by pushing it all onto us.

Yesterday I wrote a rather long-winded post which was understandably ignored. So here's the point of it in a smaller package:

What do you do when your willpower slumps? When you think "I should really be doing X" but you just can't seem to get up the gumption? I had one of those moments recently. I seem to be mostly past it, but I'm still curious about what other people recommend.

I don't know about any legal issues, but ethically speaking I think Nasar's comment above illustrates a conflict of interest. No matter your intentions or your disclosures, the fact is that if you want to buy a property for a certain price, are unable to reach an agreement with the seller, and end up representing them in selling it for a different price, it is in your interest to fail so that the seller may be more likely to accept your original offer. Again, this is a fact irrespective of your intentions. The ethically sound thing to do isn't to steel yourself against conflicts of interest and use your good intentions to resist temptation, but to avoid conflicts in the first place.

This post is way longer than I expected it to be when I started writing it. Sorry about that.

When I started coming to this site, reading articles and listening to the podcast, I was not in a position to take big action in pursuit of real estate investing. My credit score was 503. I owed about $60k in student loans, which I had only recently started paying because I hadn't felt stable enough before that. I worked a full-time job downtown and spent most of my free time either dancing or teaching other people to dance. My wife and I weren't poor, but we were one big disaster away from becoming poor, because we didn't have any savings.

Since I didn't have the money for a down payment, couldn't afford a couple hundred or a thousand dollars a month on a mailing campaign, didn't have much free time, didn't know anybody, couldn't make any of the REIA meetings I knew of, and couldn't qualify for any kind of mortgage, I figured I should start with the things I could do.

So my wife and I made a budget and started reducing expenses. We started putting a thousand dollars a month into an emergency fund for the first time ever. I was eager to start investing in some way so I opened an account at Lending Club and started putting a little in there whenever I could. I set up auto pay on all my student debt accounts so I couldn't miss a payment. I signed up for Lyft and Uber to make extra money. Eventually I started waking up three hours before I had to be at work so I could drive for longer and make more money. We added me to my wife's credit cards (her history is much better than mine) and started systematically and aggressively eradicating all of our credit card debt. I started actually talking to my student loan servicing companies instead of avoiding them. Last week I sent letters requesting a goodwill adjustment to late payments they had reported.

In addition to working toward financial success, I've also been working really hard to become the kind of person who deserves to be successful. I've been practicing generosity with my friends, volunteering to help them with whatever projects they've got going on (which is a little self-serving, because I also want to learn to be handy with properties). I have been taking better care of myself by eating better and working out most days. Doing more chores around the house. Helping my wife pursue her goal of being a well-known professional artist. Playing with our cat every night so she gets some exercise and knows that we love her. Reducing caffeine and alcohol intake so I only spend money on them when I'm going to really enjoy it. Etc.

All this is to say that I've been making amazing progress. I'm still not in a position to buy a property, but I'm closer than I was. We've got over $10k in our emergency fund now. I check my credit score every week, and it's up over a hundred points to 630, which is only ten points away from changing from "Poor" to "Fair." We've zeroed out one credit card and have just one more to go before we turn to my auto note. Our house is cleaner. My relationships with my friends are stronger than they were. Our cat is still fat, but she seems happier. I can lift more and run farther.

In the last week or two, though, I've had trouble keeping up my willpower, which is the main reason I'm posting this now. I wake up at 5:30am when the alarm goes off, walk into the other room to stop it, and shuffle right back to bed for another 45 minutes. Instead of using my lunch break to work out, I've sat in my office watching Netflix. I wasted money on lunch out instead of eating the food I brought. I've been less diligent about my chores.

So I'm wondering, for the five of you who read this far: what do you do when your willpower slumps? Do you wait it out or is there something you do to kickstart it again? I've been so proud of the work I've done and the progress I've made. I've spent most of my life being lazy and unfocused and I'm terrified of slipping back into that.