Posted by Ed on July 02, 2002 at 07:47:46:
One suggestion I have for new people is to start small, but start. Your attitude with your first investment shouldn’t be so much to make money, as to learn how to make money. Then as you do more and get more experience, the confidence and the money will follow.
And I think your criteria should be JUST a little looser with your first one - e.g. you’ll take a slightly smaller cash flow, etc. That’s so you don’t end up with a terminal case of analysis paralysis. Then as you do more REI, your goals and criteria get tighter and more ambitious.
For example I dug into my savings to put down a 20% down payment on my first one (Regardless of what the Sheets course says) just to make the numbers as safe for me as possible to give me confidence. Now that I have more experience and confidence I usually put little or nothing of a down payment any more.
And as for analysis paralysis, I think George Patton once said something that applies to your first investment - something about an average plan aggressively excecuted this week is better than a brilliant plan next week.
I remember my first mortgage pymt on my first one - $258.72. And my attidude was I’m going to find out whether or not this REI stuff works, even if I lose $258.72 a month for 30 years.
I held that house for several years before doing a 1031 exchange for a bigger property, And sure enough I got it rented most of the time and overall did very well. And if you calculate the return on investment even with my 20% down payment, as a REI investment it wasn’t outstanding, but if you compare the ROI I got with any stocks or mutual funds I had, you’d see why I got hooked on this business.