I Hate Insurance!
Everyone starting in real estate investing wants simple, straight-forward answers that apply universally to real estate investing. Unfortunately there isn’t ONE magic answer in real estate – every single person will be in a different financial place in their lives and have a different answer. And I completely understand the beginners’ frustration with there not being just one answer… it should be much more simple than all that!!!
I have the same feeling about insurance. I get insurance on all my investments – it’s typically required by the lender anyway. But if I have to change companies or details – OMG, I want to poke someone’s EYES OUT. The details they need, the personal information, the structural information, my car insurance information, my social security number & drivers license number??? GET OUT! Just give me a ballpark quote!
But, for all my frustration, I understand. Real Estate often looks the same way.
Every day – every single day almost without exception – I get the same questions from new investors: “will it cash flow?”. And that’s when I have to become the dreaded insurance agent… I have to ask “How much are you putting down?” and “How’s your credit score?” which most people don’t really know – heck, half the time I’m not sure where mine is either. I ask questions that – realistically – are the lenders questions. I try to ‘ballpark quote’ people, but it’s tough. I know people want straightforward and universal answers, but there aren’t any. Some people qualify for great interest rates and some don’t. Some people have 20% down on everything they buy, some don’t. Some people get option arms, some people get 15-year fixed mortgages… and everything in between. I can, however, tell them what they’ll be able to get in rent, but the ‘cash flow’ question will depend on them.
Luckily I work with great lenders – ones that specialize in investors, and investing mortgage products. They can quickly and easily help investors target their preferred monthly payments, based on their 2 or 3 favorite loan products that they qualify for. THEN I actually CAN answer the question “will it cash flow?”!
