Information Overload & Analysis Paralysis

General Real Estate Investing
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If anyone else suffers from this, please let me know… More-so, IF ANYONE KNOWS HOW TO CURE IT, PLEASE HELP!

I am an aspiring investor in Milwaukee, Wisconsin. I am needing a coach/mentor, and honest/sincere guidance into this awesome world (Real Estate Investing). I have read books, watched Webinars, etc. The thing is, when it comes down to acquiring help, it seems like it always takes thousands of dollars to acquire it! That is one of my first problems… I HAVE NO MONEY AT ALL, and my credit is just about 500.

I want to be successful in my business; not only for me, but to give my children a better life than they’ve had.

~H-E-L-P!~

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You have to get your financial life in order first before people (and banks) are going to be willing to lend you money to buy your own properties. You will need to make whatever sacrifices necessary to make more money to get things straightened out for yourself. This could be by altering your standard of living and cutting out things that aren’t necessities. It could also mean picking up another job for now. With no money and a credit score that low, your options are severely limited in this economy for REI. You can try to find deals for other investors and have them pay you a fee for doing so (bird-dogging). That requires little to no money on your part. If you’ve stayed up late at night, you’ve probably seen someone on TV with a “program” trying to tell you how simple and cheap it is to buy property. Most of that stuff they’re peddling is BS and they’re out to make $50 off of you and whoever else they can convince to buy the “secret to REI” from them. There are some good points to take away from certain books, but some of them are way off base too. There are plenty of people here on this site who are DOING REI and not SELLING REI INFORMATION. You’ll get plenty of advice on here from many different points of view. All it costs is whatever it costs you to be able to log on. Most of us are here to help others, ask questions ourselves, or a combination of the two.
The analysis paralysis is the fear of the unknown. This isn’t for everyone, but over-analyzing every “what if” situation will keep you on the sidelines forever.
If you’re not in the position to buy properties on your own (which in my opinion is where you stand), take this time to get your credit and finances in order and educate yourself so you’ll be ready when the time is right for you to be doing your own deals. If you can bird-dog successfully, you can start learning the ropes, put some cash in the bank, and get your credit up.
If you have any specific questions, just ask. You can also use the search function at the top of the page to see if there is anything else written on here about a certain topic. My suggestion is to look thru the forum list and pick out which ones interest you. Start with the oldest thread and read every post up to the current ones. This will take many hours and some effort on your part, but you’ll learn a lot and then it will be easy to keep up with the new posts each day. I also suggest you take notes along the way on different topics. I put all my notes in a MS Word document so I could reference certain details later.
Good luck.

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This is my response. I am very straight forward, so don’t be offended by anything I say.

I have a friend with bad credit and no money, but her problem is that she is just lazy. She has big dreams, but will never take action to make them come real. She lives in a Carleton Sheets and Cashflow fantasy world.

In reality she dreads the idea of “going door to door”, “making phone calls”, “networking”, “flipping houses” or “being a landlord” when it gets down to it. She talks a big talk and wants to get rich - but when it comes down to it shes fat and lazy and will never take action. She has chose with her actions, not with her words, to be perpetually poor by keeping her not-so-good job for life.

Anyway, back to your story - your investing options are limited. You won’t be able to deal with traditional banks in any form or fashion. Scratch traditional bank loans, lines of credit and probably even credit cards. That really stinks.

First & foremost, I would focus on improving your credit and putting some money in the bank. I would get a better job if you need more money, or start a part-time business. You could also generate cash via real estate by doing the following activities: wholesale, bird-dog or do mobile home notes ($3k +/- is required for mobile home notes).

Don’t worry, I had bad credit and lots of debt back in the day. Now I don’t. I make a big six-figure income through my business and have some rental properties too. You CAN change your life for the better. But you must want to do it, and take action, not just dream.

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This is clipped from a post that was in response to a post like yours.

ReGrasshopper,
I’m a newbie to real estate investing and have been actively making offers for my first property for the last couple of months. I’m sure my story is not unlike others here.
At one time, I was a financial mess. I had a bunch of credit card debt and bad credit. Like yourself, I thought that real estate investing could get me out of trouble. I bought the Carleton Sheets course. I soon learned that I had to get my financial house in order before that could happen.
The turning point for me was purchasing some Rich Dad books and cd’s. I learned my lifestyle had to change.
I scaled my spending back to a bare minimum. I took a job in the industry I work in now and freelanced/moonlighted on nights and weekends. I started paying down my debt and repairing my credit. I was miserable at that job but I was making slowly making progress. Then, I got laid off from that job. In hindsight, that was the single best thing that ever happend to me!
I now work for myself and have paid off all of my debt. My vehicles and equipment for work are paid for. I have “0” debt and have ample savings to start investing and have reserves for a rainy day. It took some time and sacrifice for me just to get to the point of being able to invest. The CPA I use for my small business has a real estate brokerage as well. I’m working with a great agent who is also an appraiser and investor. She understands exactly what I’m interested in and has actually talked me out of properties that weren’t good for me. Conversely, she has brought properties to my attention that I’d have overlooked. I view this as the start of my “team”. This is my starting point for investing.
For education, I would read or listen to Rich Dad, Poor Dad and The Millionare Next Door. I just downloaded propertymanager’s book and read the first half of it in one sitting. In a word, it’s SOBERING! I recommend it.
My advice to you is to get control of your business and finances by making whatever changes are necessary. Get a realistic view of where you are and where you will be if you don’t change anything! Adjust your lifestyle and live well within your means. Repair and monitor your credit and build up some savings. Then go at it!!

JP

Update-

 Since that post I've purchased my first property ( a 4 family home) and am rehabbing it. I'm not quite ready to buy another property yet but I should be in that position by next year.  Take care.

JP

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I do not know much about REI yet, but I do know a lot about learning.

You should not have any information overloads. That means that your mind is not trained or use to learning. Your mind should store information away (compartmentalize it) before moving on, making a clean slate to learn more. If you brain does not store the information and you keep feeding it more, it cannot process the information and will give up.

First check out your learning style abilities and use mediums you are good at for the best results, http://www.memletics.com/manual/learning-styles.asp

Also, you need sleep! Do you know if you get 6 hours or less sleep for just one night, your brain does not function properly? It does not use the area that solves problems, but relies solely on what it knows already. So, you will resort to repetition and solutions you have already figured out if you do not get enough. On top of that, research has also proven that NOTHING is retained in long term memory (only short term) until you get 8 hours of sleep.

I know this stuff because I have to learn a lot and solve problems every day in order to stay up to speed in my current field of work.

By the way, I am in Milwaukee’s suburbs. There is a REI Milwaukee Club http://www.milwaukeering.com

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InvestorMom,

You have gotten some million-dollar advice in the previous posts. Now here is some more:

To be successful in Real Estate, first you need to be successful in ADL, which is Activities of Daily Living. This is how you can judge someone’s competency. You need to be able to live in a reasonably clean home, put food on the table 3 times a day, do laundry, take out the trash, water the yard, maintain your car, pay the bills, take care of the kids.

First you do all those things, and do them well every day. If you can do that, then you can start the next step: Pay off debt, get an extra job (babysitting at your house brings in money while you’re WITH your kids), raise your credit score, start a savings account.

These first steps are going to take some months to do. Hurry, because this is maybe the best time in decades to buy a home or home with an investment property. The government WANTS to help you get a home. Don’t waste this chance. That is your 3rd step.

Just like MotivatedCEO I am a little harsh on “Co-dependent Investors”. I think that term is from Kiyosaki. You don’t NEED a mentor to hold you by the hand. You should be doing all those above things by yourself (keep your own profits) with just advice from others.

I am a little burned out because I mentored a few relatives and friends. They would desperately ask for help, I would tell them what to do, and then they wouldn’t do it. For them, TV, movies, shopping, hanging out, or just complaining was more important. It took me a while to see that they were still stuck on step 1. First they needed to clean their houses, take care of their stuff, etc.

Good luck. I hope you are the 1 in a 100 who is not a co-dependent investor.

Furnishedowner

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I am a little burned out because I mentored a few relatives and friends. They would desperately ask for help, I would tell them what to do, and then they wouldn't do it. For them, TV, movies, shopping, hanging out, or just complaining was more important. It took me a while to see that they were still stuck on step 1. First they needed to clean their houses, take care of their stuff, etc.

In my opinion, one trait that almost all successful people share is self-motivation. If you need a mentor to hold your hand, you simply won’t make it in this business. Furthermore, your credit score is a measure of financial trustworthiness. You need to work HARD to prove that you are trustworthy in financial matters. There are 168 hours in a week. That is PLENTY of time to work two full time jobs and still have time left over for sleep.

Most people are simply not willing to do whatever it takes to succeed!

Mike

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Hi Mom

Don’t let the negativity or lack of faith in your ability that you’ll get from others stop you from trying to reach your goals. Just because you don’t have cash or credit is not a reason for you to delay trying to reach your goals; it just makes it a more interesting journey…

Take stock of what you have already learned and create a plan for yourself. Find away to partner with another investor that has the cash and credit in return for your assistance in finding, inspecting, repairing and marketing the property for resale. Along the way you’ll learn how the process works and hopefully earn some cash for your efforts.

By the tone of your post, I can only assume that you are not in the position to pay down your debts to restore credit as you income isn’t rising quickly enough for you to get ahead of the changes in the costs of living. That being the case, the best way for you to overcome your situation is to get into the game now and run with it.

good luck and keep your head up

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Mike,

Got to disagree on this one. Your credit score is not always an accurate measure of financial trust worthiness. Some times things happen in life that make having a great credit score impossible. Things like divorce, illness, a death in the family and even the part of the country that you live in (if you live in an area where all the jobs moved away and you are tied to family) can all affect the score. However the credit score is not always a reflection of you, it is just a snap shot of your financial condition at a particular point in your life.

What is a reflection of you is the fact that you do whatever it takes to take care of your family and to ethically achieve your goals. Believe in yourself and don’t dwell on the fact that your credit score and cash balances are not where you would like them to be. It will work out if you decide to get started on your dreams now.

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Hassansr,

All the excuses notwithstanding, your credit score IS a measure of your financial trustworthiness! The fact that a person has a divorce or medical problem or death in the family doesn’t change the fact that they don’t pay their bills. All these excuses do absolutely NOTHING to pay back their creditors.

This victim mentality is EXACTLY what’s wrong with this country today. More hard work and fewer excuses is what this country needs if we’re ever going to get back on the right track!

Mike

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No, I said not always. at many times there are extenuating factors that effect your ability to repay your bills. In 1996 my son was born 3 months prematurely, causing us to run up $800,000 in medical bills as he was in the hospital for 2 months in prenatal care. There was no way in hell that my wife and I could pay that, but that didn’t mean that we were not credit worthy.

we worked it out, restored our credit and moved on to bigger and better things. Now that kid is an “A” student in middle school and doing well.

While I do agree that some do have a victim mentality, most people don’t. They meet adversity and over come, haven’t you, Mike?

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In 1996 my son was born 3 months prematurely, causing us to run up $800,000 in medical bills as he was in the hospital for 2 months in prenatal care. There was no way in hell that my wife and I could pay that, but that didn't mean that we were not credit worthy.

Certainly it does! I’m not saying that it was your fault. However, what I am saying is that no way would I loan money to someone that can’t pay their bills. Whether they are at fault or not, if they can’t pay their bills, they’re not creditworthy!

Mike

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Hassansr…

I’m just curious, how did you retire an $800,000 medical debt? Could be quite instructive for alot of people who post here…

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grants

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Hassan,

I agree with Mike on this one. It is/was your responsibility for running up that $800k in debt. You didn’t make your son sick, but you should of had insurance to cover him. Insurance is one of those basic things in life you should never go without.

MotivatedCEO

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MotivatedCEO

Please explain how I caused a child to be born 3 months early with a 3-1/2 pound birth weight?

I was making 15k a year and the insurance didn’t cover that high of an expense.

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At the end of the day, we’re all here to help each other, not tear each other down.

Investor Mom. You have my support for all your endeavours. Please continue to post your questions and begin to take action. If there is anything I can help with, please let me know. Post your questions on this forum and I’ll do my best to answer them. Hopefully the others will give positive support as well.

Get started by taking a look at your situation (cash, credit and expenses) and setting some goals for yourself while laying out a plan by which to reach them. It will take some time, however you will achieve them if you believe in yourself and stay consistent on working on your goal.