Just to give a little context, I am a 32 year old electrician and have been around construction all my life. Around 28 I had an early mid-life crisis. I had a realization of how much rent I had paid over 4 years at my apartment and felt that I should have been paying for a house. I was getting close to 30 and felt that I should have purchased a home already. So my journey began by letting my lease expire , moving into my moms house and began saving, and learning about what grown ups do with there money lol. So I get a hold of Rich Dad Poor Dad and start diving into real estate investing on Youtube. These are some things that I had to experience for myself to really make an impact on my perspective.
I began investing during covid July 2020, like most people not really understanding the fundamentals. You read about things that you cant really understand until you experience them and with RE investing that is very much true.
(1) I bought an REO property with a 203k loan that gave me about 100k in equity. I waited a year to cash out re-finance. I bought another house out of state without finishing the first house 100%. This made it hard for me to get property management, tenants and contractors while I was working on the house out of state.
(2) I should have kept as much capital as I could. Should have kept a comfortable reserve position. I spent a lot of time being idle because I wasn't able to buy materials.
(3) Maxed out credit cards without taking account for interest payments. Spent too fast on rehab.
(4) Buy the biggest expenses first so that it's easier to buy the cheaper ones as you go. I wasn't able to make big purchases while trying to buy material week to week with my paycheck from work.
(5) Should have stayed consistent while I had momentum and money before interest rates and material cost went up. Time is money.
(6) Don't depend on future circumstances like income or help from friends and family. I got to witness people who say they were going to help watch me struggle.
(7) I mistakenly thought I was thinking long-term but I was being shortsighted by holding on to my first property. I bought at 165k when it was worth 200k, refinanced and pulled out 32k. At the top of the market mid 2022 my first property was worth 280k, a year later after interest rates doubled, it was worth 220k. I could have had 50k profit and bought a nicer cheaper home that was in a better neighborhood closer to the next property.
One thing I must admit is I could have done a lot more networking. As an introvert I know it could have made all the difference so that is probably the most impactful advise I can give.
Has anyone else had any similar situations. Any tips or insights are encouraged. Maybe they will help some other new investors.
