Which came First the Chicken or the Egg? (Find a Deal or the Money first?)
Should you be out looking for your First/Next Deal or Arranging for the Financing?
Personally, I like to get the Financing or Access to Funds. I don’t like to commit to something I can’t follow through on. Why waste someones time? Why waste my own time? What is most important, is to find out EXACTLY what Property and Terms those Funds will Finance. In the extreme case, look at how much trouble one of the more important Investors got into. Do you remember Jack, of Beanstock fame? Look at what he went after? what he got? and How much trouble it caused?
e.g. I recently committed to fund a deal, non-owner occupied SF for 75% of the purchase. The ecstatic RE Investor said “That’s great, I’ll just get my boyfriend to lend me the other 25%!” 😉 Sorry it doesn’t work that way with me, YOU’ve got to have 25% in on the deal, if you’re on the Deed.
So whichever you’re inclined to start with, Deal or Money, you’ve got to be doing one or both of them, right NOW!
If not, let’s figure out WHY not?
Too busy, Not ready, Into something else right now, The cat had kittens, You’re going away, You need to finish something first.
Let’s lift your “hood”… It’s probably Fear, mostly Fear of Failure which might lead to embarrassment?
Hold on, What’s THE classic American Movie?
Rocky! of course.
This poor amateur gets beaten, bad, several times but ALWAYS picks himself up and tries again until he’s Victorious!
One of my favorite songs, by Jimmy Cliff
You can Get it if You Really Want It!
The refrain is:
You’ve got to Try, Try and Try, Try and Try You’ll Succeed at last!”
And of course Napoleon is credited with “Don’t wait until you know everything and have everything. Start now and you’ll pick up everything you need along the way!”
There are some fundamentals that will make it easier for you.
You may want to get Educated? As an Engineer I like to know what I’m getting into. I’ve spent a ton of money on courses e.g. every couple of years I take the Basic Practice course at the MCLE It’s three days of intensive CEU training in all aspects of Law by the top Legal experts in each field. By the way if anything will take you down in this business it’s lack of knowledge of the Laws involved and they’re adding more each day:-( There are many courses offered by our National Speakers, the best being ones that have a follow up local BootCamp, where they see where we live and how their system may be adapted.
Of course I’ve gone through something like an Associates, Bachelors and PhD at the infamous “University of Hard Knocks” but you don’t have to when Networking with Seasoned Pros at our events But you do need to understand what works and what’s BS. I check in on several Blogs periodically where about 50% of the information is wrong and from someone that does not know what it should be.
Education, Networking & Blogs sure beat Hard KnocksFirst Deal and what do you do from here.
I can still recall my first deal. My girlfriend found a house that needed some work in Salem, MA. A “friend” of mine offered to “partner” with me for 51% of the deal. I don’t think I’ve seen that girlfriend move so fast, to put financing together for the two of us, before or since. There were more deals we did soon after closing. Salem turned out well. Purchase was $37,000. we sold it five and a half years later for $112,000. and glad the “well meaning” friend wasn’t involved. Yes that’s it the yellow one.
Why not right now, write down what you need to do your next or first deal? Then we can knock those items off as we go! Even draw a house at the top of a page and a bag of money at the bottom and fill in what you think it takes to get there.
Again the Engineer in me tends to gather a lot of information and process it quickly, sometimes you even need to change your beginning assumptions before the deal.
So let’s fill your notebook with Where you’re not clear, what education you need and Get It! You’ll be glad you did it this way! And probably Successful at it!
At one time Robert G. Allen, the famous “No Money Down” guru, challenged me “If you think you know something about Real Estate, write a book about it. You will find out what you don’t know, fast!” After finishing my MBA I did write that book (and rewrote it about 50 more times, finally as a successful course).
Summary – Doing the Deal or Finding the Funds? Either or Both at the same time? Just Do It! Do you have a lot of questions you’re stumped by? Network at REIA meetings, Online (use discretion, up to half is BS on Blogs) and Take a course!
Mike Hurney is a Successful Real Estate Investor, Director of MassRealEstate.net & NewHampshireREIA.org, Speaker and Author of the step by step Course: “How to Become a Real Estate Investor in 12 Easy Lessons” which is still available. and he can be reached at [email protected]