Many investors talk about finding deals and capital being the hard part in REI when, in reality, the hard part is management and maintenance.

Again, that doesn't mean they are all bad but in brutally honest opinion, I don't think private street level buyers have the skill to really flush out the risks on these.  

And what they think is a deal and reality are usually two very different things...

thanks for this post.. fake lenders are RAMPANT on BP.. and there is no such thing as private lenders that lend at 5 to 8% unless you know them personally or they are family.. so if you personally think those people exist I think your being hood winked as well.Also please remember most of the US does NOT USE ATTORNIES for Real estate closings.. so your probably east coast based and that's probably your experience in your neck of the woods.the reality is. .for 99% of BP folks looking for money .. and they have little or no experience have limited capital IE can't get a loan at their local bank.. then their local HML is the choice they will waste untold amounts of time etc chasing unicorn lenders that do not exist

All of eXp's training is online, and not a webinar but in our exclusive virtual reality environment.  

Here's an example of a property we bought two years ago in 92105, with numbers rounded for simplicity and using your 3.5% interest rate example (an investment property rate you won't get today w/o big points, BTW):Duplex purchase price $400k - 60/40 building/land split.Depreciable basis = $240k ~= $8700 depreciated per yearRent = $2800/m = $33600/yMortgage = $300k ~= $10300/y interest (year 1)Maintenance = 8% gross rents ~= $2600/yProperty Taxes = 1.1% = $4400/yInsurance = $700/yUtilities ~= $2400/y ($100/unit/m water+sewer)Vacancy and Loss = 5% = $1700/yMisc Stuff = $500/y (mileage, other soft and hard expenses to be claimed)Total Income: $33,600         /         Total Expenses: $31,300Y1 Retained Earnings (P&L Profit): $11,000Y1 Tax Reported Profit: $2,300Y1 Mortgage Principal: $5,800Y1 Balance Sheet Delta: $8,100  (8.1% Y1 ROC)A couple notes:Capex is not included here because depreciation has been taken on the balance sheet (in theory, they are equal values - in reality, that capex cost will very likely be less than the depreciation in a market like ours).This is year 1.  

I had the same question when I started as a real estate investor and so let me tell you the reality with being a real estate agent.The problem being an agent and I have been one for 11 years at companies like Keller Williams is Mindset.

Is this really reality?

Harsh, but reality. 

It's nice to show 100% collected on your property but in reality this rarely happens in that large of a complex so if the largest problem you have is doggie dodo .