Newbie Concerns?
I am organizing an article that highlight the concerns of a new investor. In particular I am interested in what people find scary or a risk. The 'what if I can not...'
If you are new and could take a minute to post the top 2 or 3 things that would be great.
I will summarize, collect comments from the experts here as to how to mitigate the risks and then turn the summary into some sort of article for the board.
This will not be an FAQ, more a quick way to be reminded how to keep perspective and how to hedge the downside of property investing.
I have some time and thought this would be helpful so if I can get a little assistance from you...
Thanks in advance.
John 
I guess one of my biggest concerns would be...what if I use all my savings for one deal and it falls through than I have to start all over. Another would be how do I spot the profitable deals...what if I get stuck with some deal that ends up costing be more than it is worth. I guess those would be some concerns I could probably think of others but that's all I could think of now.
Some concerns when I started were:
1. How do I find buyers for my deals?
2. How do I find motivated sellers?
3. How do I find financing?
Just some questions I asked myself when I started.
My main concerns are:
Am I structuring the deal correctly?
Did I over estimate the home's value?
I would love to have a list of average costs for minor repairs to do quick evaluations
Thanks...good idea.
Some others...
Can I really get started in this business part time?
How do I estimate repairs when bird-dogging?
Finding motivated sellers is my biggest concern when starting out.
Great start. Thanks everybody. Do keep those topics coming.
Looks like the issues will need to be grouped by the invetment type (rehab vs landload for example).
John
What are some resourses that will get me started with proper investor type thinking?
Books like "Rich dad Poor Dad" "Millionare Next Door"
What are programs / materials that seem to work?
This site and the free ebook on it, Ron Legrand isn't bad, give refrence to places to get cheap ebooks - ebay
What should I do to start?
Read Read Read Network Network Network - build your team 1or 2 agents, ,Accountant, Lawyer, Investor. Attend REI club, Make some Biz cards and set goals/visulize continue to do something each day to succeed dont let your motivation/fire die.
Don't make a deal that just cant happen.
Basically a person starting out wouldn't want to put thier neck out for a measly 2-3k profit when it could be a loss. Not to say you wouldn't learn but when you are starting the numbers must be more generous before you jump. Analyze 3-4-5 times then consider all costs and if the numbers add up bite.
The biggest question I get from new investors is
1) What will I qualify for
2) why don't I qualify
3) I am going to quit my job and do investing full time. Will that hurt me?
4) How do people buy with zero money?
Lori
[addsig]
What if I don't qualify for what I need?
What if I don't have a large enough down payment?
As a newbie to the buy/rehab/sell side of investing, my biggest fear is "What if I've overlooked something, and get in over my head?" Even though we use a contractor to look at the homes we're considering, even they can't see inside walls, or predict plumbing disasters when a house is winterized, or see what's underneath 3 ft. of snow outside.
As mentioned above, the deal needs to have enough room in it to account for any unexpected nasty surprises.
I think your idea for an article is an excellent one, and I look forward to reading it. Thanks for taking the time to do it![ Edited by Mustangmom on Date 03/10/2004 ]
My biggest concern: What am I missing? Which piece of the puzzle is gonna bite me in the...
So much paperwork is required, and I don't really want to learn the hardway. I can't afford it.[ Edited by StellarSprite on Date 03/10/2004 ]
Ithink my biggest concern would be just getting through the first deal. I have done tons of research. Just make sure the newbie knows all the steps of a deal.
Those are my main concerns.[ Edited by kellyntx on Date 03/10/2004 ]
All of the responses so far are great. I would also add, advice on how do you go about networking in your local RE club (example, what do you say to people you just meet before the speaker portion of the RE club meeting starts. How do you "break the ice" so to speak.) Also, If someone is looking for a mentor, maybe how do you screen mentors. (I'm sure there are horror stories of unscrupulous investors taking advantage of newbies.)
My fear is, is it a cut-throat business?
Is this a good area for this business?
What contracts do i use or where to get them?
How do i determine the actual value of the property quickly on the spot to get it?
Mostly i want to know the flip method inside and out.
Do i need money to get started?
My concern is as I continue to add properties to my porfolio (thus increasing my debt and monthly mortgage payments), what if I have several bad tenants at once who fail to pay the rent. Even if I evict it can be costly.
Great idea for an article,
I started thinking about my REAL concerns right now and I read the previous posts and they all seemed very small. Puts it into perspective for me. Anyway, here are mine:
1)Fear of making a mistake
2)Finding motivated sellers
3)Looking stupid by not knowing what I am doing
4)Getting qualified with a BK on my credit.
5)Starting with no $$$
I also have to say that by reading the posts here everyday for the last few months and listening to the LeGrand tapes, I'm overcoming most of these concerns.
-Paul
My main concern is finding a great mentor. I love researching properties and feel pretty comfortable selling ideas, but I just need someone who wants to share their knowledge for a greater return! I spent the last few months reading up on different aspects of rei and the L/O technique is one that most interests me. I'm interested in both MA and CT. ANY suggestions???
My worry before starting:
What is the best strategy for me, ex: Landlord, reseller...etc.?
How do I find a good deal?
How to start the right way?
After reading this board for 3 weeks alot of questions have been answered, except.
What is FIRST?
research, read, network. Got That. but once I am ready to do a deal, birddog, wholesale, purchase and hold, sub 2 (whatever that is) What Exactly is FIRST?
My biggest question as a new REi is how to protect my Assets, limit my liability and tax questions. I also have a fear of paying too much for a rental property and getting screwed when it comes to selling it
After reading all I have read for the last 3 years, reading this site (by far the best info anywhere) and preparing, preparing,preparing, researching, researching, researching, my next question is, what comes first? Find the investor or the property. If I could just figure out a reasonable sequence to go by (of course not carved in stone but at least an idea) I think I would be wasting less time and getting more done. I have a couple of investors, but see so many properties, which to give them first? VA, FSBO, or all at once?
I tried to bird dog for some one a year ago and got burnt. I think I was giving him too much info at once, he said I was calling him too much, but I thought an investor wanted to move on things, not wait on them. How many deals should you present to your investor at once and how often should you follow up? Sorry I got longwinded.
Lorraine
My concerns are:
1. What type of deal to focus on?
2. Money
3. Talking with sellers, will I screw up?
4. Not knowing all I need to know
5. Dealing in the wrong type of area
Great topics, I'm thinking along the line of;
Where to find buyers/leads?
Should I use my own money?
Is it possible for me to hold the property for 90 days and not pay anything out of my pocket. How hard will it be for me to find a buyer in that time?
My main concernsare money, being unable to find a buyer and screwing my reputation
Most of my concerns have been voiced already but I'll just echo them again for emphasis.
As a new investor I'm concerned with:
1. How to set up my corp. and team (S or LLC, lawyer, attnry, etc.)
2. Learning the details of paperwork, terms etc.
3. Deciding the best type of REI to begin with.
4. Concerns about structuring a deal so I don't lose money up front.
Great idea for an article.
1. where to find good contracts and how to use them appropriately.
2. knowing when to walk away from a deal.
3. keeping my personal assests seperate from my REI assests, how to protect myself.
Lots of good posts.
I will start to collect the info so far and shape it into an article. Is there anyone who wants to proof read it before I submit it to the articles section? Someone who is really good with grammar would be perfect.
Do continue to offer other concerns, issues, suggestions, ideas. I am only working on the draft version at this point.
Thanks again!
John
1. Who are the major players (REI superstars)? With proof.
2. What works the majority of the time?
3. Products rated by seasoned pros?
4. What are the inside tricks the lenders use? Are these secrets being let out anywhere?
looking at this from a landlord side in order to build passive residual income.
1. price range for initial investment to generate moderate cashflow without jeapardizing current cashflow.
2. what do I look for in order to attract quality tenants when purchasing, ie. should I buy more expensive properties up front in order to be able to charge more and hopefully attract better tenants or just look for the great deal and hope to be able to attract those long term clean tenants.
3. if you are looking for rental houses what do you think are the most important factors to consider. Location, Location, Location just like another business or is there something else to consider that is more important.
My top worry as a newbie is not being as prepared and knowledgable as I should be, which in turn leads to a mistake, and then a loss or bad deal.
I learn best by example I wish there were detailed case studies of both good and bad deals to learn from.
Also people talk about their RE I toolbox. What are the good tools? What software and technology are people applying to help them in REI.
Oh my God this could be a novel for me!
I tend to over annalize as it is, so everything seems overwhelming! Confidence in my ability will overcome all fears! Just need to keep gaining confidence! To quote a very successfull train: "I think I can I think I can I think I can!" and I will!
Greatest fears-
1. Getting the financing I need
2. Money-lack of and losing it!
3. Not knowing EXACTLY what to do next!
I have all the resources I need to find anxious sellers and buyers, I have studied REI for a couple of months(collectively), I have the skills to perform effective marketing, I have the skills necessary to deal with all the players in the game, I just don't have the notz to pull the trigger! YET!
Sickdog
If continuing another job in the beginning, how many hours and what times of day/week should be focused on REI?
How does one make time for clients when working a 9-5 job?
Will restriction contact to evenings and weekends appear unprofessional or lack of dedication from not being available more frequently?
Accounting strategies or how to appropriate funds when $$$ rolls in?