Okay this one goes out to all my newbie brother and sisters who may be struggling with trying to get their first deal done. I want to show you how it’s not really that hard and you can easily get a deal done in 30 days from when you start. Let’s first understand what might be holding them back.
The main reasons people don’t do a deal:
1. Lack of knowledge
This is a big one that holds new real estate investors back. Too often we think we have to learn how to do a deal from a $5000 seminar. Since many can’t afford that, they just never seek out the knowledge. If you don’t know how, all the motivation in the world won’t cover for it.
The knowledge is out there to be had. I promise you that there is no more information contained in these seminars than you would get in a book for free at your local library and/or by reading online. In fact, the library has so much free information on the basics that you don’t even need to worry about ever stepping into an overpriced seminar. That’s why we priced our courses at affordable prices. For more information visit these links.
Another very cost effective resource is your local real estate investment club. Don’t be afraid to ask your fellow seasoned investors what is working for them. It will usually cost money to attend but there is nowhere on the planet you’ll get better more realistic and practical advice from.
2. Analysis Paralysis
Sometimes we’re just so worried about whether or not it’s a deal, we just never act. This is especially true when you’re starting out since you don’t really know what the average house price in a certain area is valued at or you have no real basis for estimating repairs in a home. This can lead to not acting since you don’t really know whether or not you’ve really struck gold.
Don’t even worry about learning the market. In fact, you don’t need to learn any market. Learn to rely on the professionals who specialize the most in that area. However, I don’t mean realtors most times. Instead, use your buyers list to tell you what they’d be willing to pay for a property. If the number is higher than what you can negotiate your deal at, you’ve got a deal. If that’s not an option, you can always look at comparable sales through a real estate agent but you will usually have to butter them up to quickly provide them for you. For contracting repairs, getting professional estimates are free. The rest is simple math.
If an investor is willing to pay you $100k for a property as is, you need to get it at $90k or less bare minimum. If you are relying on an agent for comparables, say a property similar to yours in mint condition in that area retails for $100k and your contractor has told you that you have $15k worth of repairs, you need to get that property for $75-80k or lower in order for you to have some leeway.
3. No Buyers
Of course, step 2 doesn’t work if you don’t have any buyers to show your properties to. Most investors have no real buyers to show their properties to and as a result, they just don’t close anything. In fact, I have seen many of these people that are great at getting deals under contract but no one ever told them how insanely important it is to have a targeted list of buyers.
Always be building your buyers list. Attend real estate seminars, talk to private lenders (since often they are buyers as well), check out title companies and closing lawyers, advertise properties online, network at other professional meetings, and attend new home buying open houses. Make sure when you attend the open houses that you look for buyers who are attempting to buy 2-3 properties or more, since they won’t be retail buyers. Attending open houses on other fixer uppers works wonders as well since these are your ideal target market.
4. No Action and/or No Belief in Themselves
The biggest reason though is they’re just afraid and they don’t act as a consequence. For all the newbie investors I’ve met at clubs struggling to get a deal done, I can always ask one simple question. “How much time do you spend calling FSBO ads or marketing your properties in an average week?” Embarrassed, they will often round up a few hours from the minimal hours it is closer to in reality.
You can’t pay someone else to do your push ups for you. At some point, you have to step up and do what’s necessary. If you work at it 40 hours a week with laser sharp focus, it’s impossible to not do a deal. There are just too many deals to be had right now. Doing a deal does not involve talking about real estate investing with others, even reading online, spending time at discussion forums, or overly networking. Get to it and hit the phones. Get a deal as fast as possible, find some buyers as fast a possible and settle on a good one, repeat this process over and over. If you’re dragging any of that out, you’re not doing it right.
If you’re willing to sort out all the common newbie investor issues, your first deal can be done in 30 days, if that. You can’t fail if you don’t accept failure. Happy deal making!