There's five big problems that beginning real estate investors face. The good news is that by focusing on cheap investor houses you can either overcome or cut these challenges down to size. Here's the 5 big problems (in no particular order):
- Lack of money for a down payment
- Don't have a track record
- No funding available
- Hard to find a Realtor who'll work with a new investor
- Fear of making a mistake
Lack of Money for a Downpayment
This is the most common reason people give me to explain why they are waiting to get started investing in real estate. The funny thing is that if you are saving up your money to use as a down payment on investment properties then in most areas the value of that house may be going up faster than you're building up your savings.
For the person who's trying to save up for a down payment, each year that goes by actually puts them further behind than they would have been if they'd found a way to get into investing by starting out with cheap houses. If they realized that owners of cheap houses are much more likely to agree to creative financing that doesn't always require a big down payment then perhaps they could get started much more quickly.
Don't Have a Track Record
I was nervous when I first got started investing in real estate. I was an auto mechanic afterall, what right did I have to go out making offers on properties telling the sellers that I was a real estate investor?
In hindsight, because I was focusing on cheap investor houses, the sellers of these properties were probably thrilled to have someone with or without experience who was willing to take over their cheap houses. The owners of many of these homes are not only open to, but need someone like you or I to go in and buy their properties.
No Funding Available
The great thing about cheap investor houses is that sellers of properties like these are WAY more likely than the average homeowner is to consider accepting your "carry back all the financing" or other creative real estate buying strategy. Once you discover how to get the seller to provide the financing, or how to take over the existing financing, this problem goes away completely for you.
Hard to Find Investor Friendly Realtors
Most of the cheap investor houses that you find will be for sale by owner. The reason is that Realtors don't want to put their time into a low priced deal with it's correspondingly low sales commissions. This is perfect because you can talk to, connect with, and make deals directly with the sellers.
I've also discovered that when you do find a Realtor who's involved in cheap investor houses they are worth getting to know because they are more likely to understand the investing business.
Fear of Making a Mistake
Hey, mistakes are a part of life. Real estate investing is no exception. The secret is to either keep your mistakes small and learn quickly from them, or to find someone who's already made most of the mistakes for you. It's usually cheaper and easier to learn from someone else's mistakes rather than your own.
I hope you've found something useful in this post. Let me know what you think by posting a comment below : )