I'm back!
I am happy to say I am closing on my next investment property tomorrow after years out of the game! This. Is. Big.
Years ago now I completed a live-in flip, as well as what turned into a more traditional flip. While my first two investments went really well and I enjoyed the challenging work, I found myself stuck in the dreaded analysis paralysis for several reasons.
1. I got married! Holy matrimony...
Getting a more risk-adverse spouse on the same page as you are at the precise moment you need to make a move is a big challenge! Trying to bring my husband along for the real estate ride put added pressure to get a home run deal in a very different market from when I started investing. It certainly didn't help my husband take me seriously when I had shiny object syndrome! One day I'd be looking at out-of-state lake houses for STR, the next day I would be looking in my hometown a state away, then I'd be dreaming about glamping sites in our backyard, and the next day I was looking at small multifamilies in my new area. What worked for our relationship is I found a deal with multiple exit strategies that my savings rate could cover expenses. Even after an extensive remodel, my savings rate will cover a mortgage on the property. Obviously we don't want to have a non-rented or non-selling home on the books, but I could in fact carry it for quite some time if I needed, which mitigates our risk. Honestly, I could go on and on about the investing with your spouse topic but I won't. I will say, if you are single your challenges are different but so are your opportunities... take advantage!
2. I lost my secret weapons!
Marriage for me also meant moving to a new market and a new W2 career. This in itself took away some of the momentum I had built in my hometown. I came from generations of real estate agents and my dad was my "unfair" advantage and a secret weapon. Not only was he my agent but he knows me well. Both houses I purchased were risky. So risky in fact that in both cases general contractors discouraged me from taking on the projects. I am talking they stated things similar to... the best thing that could happen would be you buy it and it burns down. However, my dad knew I had vision and drive. He steered me away from several and encouraged at the right times resulting in decent profits. My other not so secret weapon was that my home could be my primary residence and therefore lending and money was simple. My husband purchased his grandfather's home on a beautiful river secluded from others and we don't plan to move ever. What worked for replacing my secret weapons? I got my WV real estate license. My dad will always advise but I can't drag him to properties hours away and he won't be learning my market, so I did. I also saved money. I won't have the lending advantage but I do have higher savings rate as a married woman.
3. Now I know how much I don't know!
Here enters the bulk of the true analysis paralysis. Even though I was successful, I made mistakes. Mistakes don't feel good. I didn't know about Bigger Pockets on my live-in flip and it showed. Really, what I needed really badly at the time was the Bigger Pocket's Money podcast. I found the Bigger Pockets podcast when I was sleeping on an air mattress on the floor of my first (live-in) flip because I moved out too early and the closing fell through. I was very eager to sell and hadn't been the best steward of my finances so I went looking for help. I heard Scott Trench's interview on the podcast and read his book Set for Life in that empty house realizing some major mistakes and opportunity costs due to lack financial knowledge. Similarly, my second flip would have been the perfect BRRR deal. I put $170,000 into the deal, it appraised around $320,000, rented for $1700/month, and was like a new house! I sold it and not for $320,000. I am not going to call making around $100,000 on a flip a bad deal but it was a mistake to sell in my case. It sat on the market for a bit and while I was waiting to sell, I missed a huge opportunity to buy into a storage unit facility with my father. This 20/20 hindsight really threw me into analysis paralysis. I don't mean it negatively, I just realized the power of education and started missing the action steps under my new circumstances. Understanding the power of education and shiny object syndrome are eerily similar. I have learned a lot and I have a lot to learn, but am excited to learn from action even though I know mistakes will be made.
I started this post to share my new deal maybe ask a question or two after years of no investments, but in my excitement my thoughts went more to the most recent part of my real estate journey. It certainly didn't really feel like I was real estate investing while I was getting my finances in order, or when I was listening to the Real Estate Rookie with no investment prospects, or when I was watching homes sold to other people but now that I am taking action again, it feels very important. I am excited to take lessons learned and applying them to this next project and hope to reach out with questions soon.
If you've made it this far, thank you for indulging my reflection and here is a before photo of the next project.
