Here are the top 3 obstacles that real estate investors face and how to overcome them.
No. 1 – I can’t pay for deals with good looks! Or, great deal but no money!
This is a common obstacle I see among many investors.
I suggest starting off by tapping into your closer friends and family network and seeking out joint ventures and partnerships. Another thing that helped me when I first started in real estate was saving my money and becoming extremely frugal. I worked hard for a few years, while saving every penny I earned until I had enough for my first deal.
In the meantime while you are saving your money, it is still important to live and breathe everything real estate on an ongoing basis. Establishing relationships in your network is also very beneficial in building your career as an investor.
The Midwest offers some great numbers where you can find distressed properties in owner-occupied areas that will set you back no more than $40,000 – $50,000 total (purchase and rehab). It is important to keep a journal, take quality photos and videos, and use them apart of you growing portfolio for when and if you ever decide to knock on the doors of hard money lenders, they will want to see a proven track record.
2. Now we have money but no deal!
Many folks from the west and east coasts of the U.S. have the money but can’t find a good deal.
I feel your agony. I also dealt with crazy high real estate prices and homes with zero cashflow back home in Australia.
Remember real estate is a numbers game, so don’t forget to work the numbers. Check Craigslist daily, Send Yellow Letters; stress your criteria to local Realtors, wholesalers, and bird dogs; brand your office car, T-shirt, and business cars; ask grandma at K-Mart if she knows anyone selling.
Leave no stone unturned. Once you’re committed to working these numbers daily- you will find the deal you are looking for. When you look up, your inbox and voicemail will be flooded from everyone and anyone. This happens to me on a daily basis.
People will quickly find out if you’re indeed a genuine investor in real estate who has either the cash, influence, or authority to buy their property.
Always keep in mind that regardless whether the market conditions are booming or in a glooming period- there are always good deals to be found. 🙂
3. When you have an investor-buyer around but no deal to give to them
“Who has the gold makes the rules.” In my opinion, genuine buyers/investors are the gold.
If you don’t believe me- try posting on various online real estate groups with, “I have 10 amazing 15% net cap deals available” or “I have three strictly vetted and genuine cash buyers looking for 15% net cap deals.” You will probably get 10+ replies to the latter post within a couple of hours — and lucky if you get even one response to the first one over a two to three-week period.
If you’re not established in a particular area, but have a team on the ground that you have great relationship with, make sure that those guys are in it for the long haul before you put your name behind the operation and start offering their properties to your buyers. It’s even better if you personally own property in the area, as you will be more credible and can speak with better conviction. I personally wouldn’t buy from someone if I know they don’t own it themselves.
The same thing goes for another investor who is actually established in an area of your buyers interest. If, at the time, you don’t have any deals available yourself, you can establish relationships with other investors or companies that work on a larger scale.
This could enable you to never have issues with supply or demand. Before you proceed with proposing such a relationship with someone in your network you must do your due diligence and make sure that the quality of workmanship on these properties is second to none and you are 100% comfortable putting your name behind the investment.
Once a sale has been made, don’t leave your investors hanging. Have a great property manager in place and everything and anything else needed to make the investment a success for your investors. Growing your personal/business brand through word of mouth referrals is the cheapest yet most powerful way, in my opinion.
One thing to always remember: “It takes a lifetime to build a reputation and only 5 minutes to lose one.”
Visit Engelo’s site here.
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