What's Holding You Back?

Breaking Through Investment Barriers and Navigating the Real Estate Maze

“The walls are stripped to the studs, and, I don't know, it's been a huge hassle, should we just sell it and move on?”?

“What if we end up losing money?” and “Nobody's going to want to buy this as-is.”

These were some of the questions we had as we attempted to exit our first fix and flip.? The story is rather entangled with frustrations from neighbors who don't like to see the neighborhood turnover, property boundary disputes, City Variance and Zoning Board Petitions. All of which ultimately led to a very tough decision to drop the property and let go of our second Fix and Flip/personal home renovation and washing our hands of a bad situation.? It was the toughest decision to make, fraught with anxiety and worry, but simplified by one simple rule.

For many, the dream of embarking on the journey of real estate investing promises long-term financial gain and offers a large potential upside if purchased and planned appropriately. However, sometimes that's not always the case.?

I know that when we first started out, it was a slow burn for many reasons. Multiple conversations with my wife left us with an unchanged trajectory. At the time, we had a new child who was our “little bundle of joy” and certainly an easy distraction preventing us from jumping into a new venture. I had been practicing emergency medicine for the previous 10 years and enjoying life.? After 2 years, we had a second little girl on the way, but I? was often left feeling limited,? in a way, held back at my current role? practicing as a bedside clinician in the emergency room. I had started my family, my career was well on its way, I felt comfortable in my boots daily, I had a wonderful wife and a little ranch in a beautiful neighborhood in North Texas.?

To many, this could be seen as an amazing culmination, a pinnacle of success to my years hunkered down over a desk in the library.

Psychologists’ term adaptation to the hedonic treadmill, and it seems like every two years mine kicks in with a vengeance.? You may have experienced it with the fresh new? revelry you get as you drive your new car off the parking lot from the dealership, receiving that bump of pay from your job as you get a raise, the newlywed’s experiencing the “honeymoon phase” of their marriage.?

Ian McEwan remarks on this phenomenon aptly -

“People often remark on how quickly the extraordinary becomes commonplace… We are highly adaptive creatures. The predictable becomes, by definition, background, leaving the attention uncluttered, the better to deal with the random or unexpected.”

Physically, this could mean that your back pain slowly improves. Relationally, you find rhythm in your routine with your children and partner. Emotionally, your elation of that new toy, slows/reduces to your homeostasis.

For me, my career continued to grow. I subsequently took over directorship of the department and colleagues. Certainly leading a group of physicians, managing our patients and clients, growing our family, building a new house…etc, etc may seem to be (even now) overwhelming, buy my treadmill continues to roll forward in time.?

I say all this to bring to light the obvious…life always continues to move forward. There's always something new and always something developing as time slips by our fingertips.? Will you continually let this be a barrier, or will you allow the process to take you to new heights?

Our paths to this this is not without its obstacles. As investors deeply entrenched in the world of property ownership, I've come to recognize the barriers will always be presenting itself and they will always to deter even the most eager. In this exploration, we'll delve into these challenges, surf the waves of current real estate trends, and hopefully draw inspiration.

What Barriers are in your (treadmill) Pathway to Property Investment?

In the realm of property investment, the financial terrain often resembles a labyrinth, with high property prices, substantial down payments, closing costs acting as formidable barriers, changing inflationary pressures, and/or rising interest rates. It's a reality that challenges even the most financially adept. As someone who appreciates the intricate dance of the real estate market, I understand the importance of unraveling these complexities.

Financial hurdles are only one of many challenges you may encounter as an obstacle. Navigating the real estate market demands a understanding of its intricacies. The knowledge gap about local markets, property valuation, and effective investment strategies can become another significant stumbling block on your pathway to success.?

Beyond the initial investment, ongoing expenses cast a shadow of uncertainty. Property taxes, maintenance, and the looming possibility of vacancies add layers of complexity. It's a balancing act between anticipating these costs and ensuring they don't overshadow the potential returns.

And then there's the regulatory maze, a labyrinth of zoning laws, permits, and taxes that every investor must navigate. Understanding and complying with these regulations can be a challenge, especially for those new to the game. I've learned to weave through these challenges, recognizing them not as roadblocks but as part of the intricate fabric of real estate investment.

Unraveling Current Real Estate Market Trends

In recent news, the Federal Reserve has taken center stage, orchestrating rate drops to mitigate the aftermath of the COVID-19 pandemic. Lower interest rates became the craze that resonated with potential investors, hedge fund investors, new homeowners and owners looking for a refinance/reno project or an upsized property. This then led to hugely increased demand on property prices. Over the subsequent 2 years, asset values exploded with resultant new challenges for investments.

Interest rates play a crucial role in the affordability of property investments. At present, historically high interest rates make borrowing nearly impossible,? but in many markets has led to actually a flattening and a decrease in property costs to purchase. It's like a ballet, each move contributing to the overall harmony of the investment landscape.? Do you buy now with higher interest rates and Leverage costs to get a better price? Do you hold out until interest rates come back down? Are you afraid that the overall Market will collapse?

Albert Einstein once echoed insight for assessing tough decisions. I think one could think of it as wisdom as an intelligent ance of adaptability, "Life is like riding a bicycle. To keep your balance, you must keep moving." He goes onto later say, “The measure of intelligence is the ability to change”.

In the realm of property investment, this wisdom holds true. As we navigate the intricate dance of the real estate market, utilizing the intelligent dance of adaptability becomes paramount. The measure of intelligence, as Einstein put it, is the ability to change. Let these words guide your steps, reminding you that success in real estate investment lies not just in strategy but in the art of graceful adaptation.

Breaking through the barriers of property investment requires strategic planning, knowledge, and a dash of adaptability. Staying abreast of market trends, such as the ripple effects of Federal Rate changes, jobs markets/region, population increases, inflationary changes and cost of living adjustments are just a start.?

Remember, the excitement, the thrill, the anxiety, the Intrigue of it all is very real and in your face when beginning this endeavor. The hedonic treadmill will, over time, re-balance these highs and lows. You must remember to avoid your analysis paralysis and jump onto your treadmill…take the first step.?

Stop making excuses. Dive In and explore your markets. Talk to a professional in your area and learn.

As you navigate this intricate landscape, remember that seeking counsel from financial wizards and industry sages can illuminate the path. Here's to savvy investing and a future filled with flourishing portfolios!

Follow me on LinkedIn: https://www.dhirubhai.net/in/nathan-ham-alternatedoor/

Facebook: https://www.facebook.com/NathanAlternateDoor

Instagram: https://www.instagram.com/alternatedoorhomes/

Twitter: https://twitter.com/TheNathanHam