Best methods for acquiring rental properties?

Real Estate Investor · Scituate, MA · Member since 2010 · 16 posts · 1 vote

Hello Everyone... new to the website as well as real estate investing... I'm trying to pull together a list of must read books as well as take in suggestions and advice from experienced investors.

What is the best way (when just starting out) to acquire rental properties? I was looking to purchase a 3 - 4 unit multi home and purely rent out then also buy a single home with an in-law type suite which I could rent out... sounds like a good idea but it unfortunately ( I think) prevents me from buying any further rental properties because of available cash.... What's the strategy for acquiring more than two places and and time periods expected?

Any suggestions on reading material as well is appreciated. Thanks.

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Mark N.A

Real Estate Investor · North Carolina · Member since 2008 · 1k+ posts · 483 votes

16y

Buy all the books you can afford. Even if you only learn one thing from each it will be money well spent.

I like John T. Reed's books because he's a curmudgeon who doesn't blow happy elevator music up newbie's kilts.

Also, do a site search here as this topic has been addressed before with some great suggestions.

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Timothy W.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
16y
Buy them.
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Timothy W.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
16y
In all seriousness, the method matters much less than the question of whether or not it makes you money. No method is inherently better than any other (adverse possession still fascinates me though), it's only that different geographic areas sometimes cater to one method over another.
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Account Closed
Real Estate Investor · Ephrata, PA · Member since 2010 · 58 posts · 2 votes
16y
"Rich Dad, Poor Dad", it is NOT a book about how to really acquire real estate properties step by step, but it was one of my first books to help change my financial mind. It makes you look at life, education, jobs and other things you used to look at differently.
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Mark N.A
Real Estate Investor · North Carolina · Member since 2008 · 1k+ posts · 483 votes
16y
Buy all the books you can afford. Even if you only learn one thing from each it will be money well spent.

I like John T. Reed's books because he's a curmudgeon who doesn't blow happy elevator music up newbie's kilts.

Also, do a site search here as this topic has been addressed before with some great suggestions.
2 Reply
Brian LevredgePro Member
Investor · Chattanooga, TN · Member since 2009 · 1k+ posts · 903 votes
16y
I'd recommend anything by Gary Keller. I've always liked his books.
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Michael C.
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Real Estate Investor · Scituate, MA · Member since 2010 · 16 posts · 1 vote
16y
Steven, I read Rich Dad a few years ago after my mom gave it to me... I read it.. felt so motivated to do something with my life but honestly had no idea how to do it... seemed like a feel good book with no suggestions...

I just ordered "Flip" and "flipping for dummies" off amazon based on recommendations on other posts... should have Flip Friday to start reading this weekend...

Anyways, I didn't really get an answer to my first question... about acquiring properties... or rather...adding properties to your portfolio...

is it typical to purchase a rental unit with cash flow.... after a year, refiance and use the extra money for a down payment on a second rental unit.... repeat... repeat.....

what are typical time periods for holding the first rental before a bank would let you take on a second property? then third etc.... maybe acquire was the wrong term.... rather, growing your portfolio... thanks!
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Carlton Ellis
Real Estate Consultant · Lansing, MI · Member since 2010 · 117 posts · 32 votes
16y
Originally posted by Michael C.:
Steven, I read Rich Dad a few years ago after my mom gave it to me... I read it.. felt so motivated to do something with my life but honestly had no idea how to do it... seemed like a feel good book with no suggestions...

I just ordered "Flip" and "flipping for dummies" off amazon based on recommendations on other posts... should have Flip Friday to start reading this weekend...

Anyways, I didn't really get an answer to my first question... about acquiring properties... or rather...adding properties to your portfolio...

is it typical to purchase a rental unit with cash flow.... after a year, refiance and use the extra money for a down payment on a second rental unit.... repeat... repeat.....

what are typical time periods for holding the first rental before a bank would let you take on a second property? then third etc.... maybe acquire was the wrong term.... rather, growing your portfolio... thanks!

The reason you didn't get an answer to your question Micheal is probably due to the fact there is no one "right" way to acquire property. You can go the route of being a rehab property owner then fixing it up and then leasing it out. You can go the "turn-key" method of buying a property that already has a tenant and therefore is already providing rental income. And the financing options vary based on what you need, what kind of credit your have and how much of a down payment you are willing to invest. You have to make a decision which route is the right one for YOU based on your own skills, talents, abilities and financial circumstances.
Fortunately BiggerPockets is a great place to learn. Iâ€™ve found that Iâ€™ve gotten the best feedback from other members of this site when Iâ€™ve taken the time to research a particular subject and come to the forum and asked an â€œinformed questionâ€ as opposed to asking a question that may have been answered in a previous thread in one of the forums or one that can be answered with just a little effort and time.

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Brian LevredgePro Member
Investor · Chattanooga, TN · Member since 2009 · 1k+ posts · 903 votes
16y
Michael,

I would try to avoid the banks at all costs. There are far too many variables involved with bank financing and only one of them needs to go wrong to scuttle your deal. You have high down payments relative to LTV and you are limited in the number of properties you can acquire, unless you find a portfolio lender.

Most importantly, you should research different RE investing methods and see if there is one that interests you more than others. As you explore that area, other doors and other methods will open up to you and you'll be able to see how they correlate with each other and how you can use them to your benefit.

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Curt DavisBusiness Member
Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
16y
Michael,

The best way for you to buy investment property considering your new is to buy from a wholesale investment company. I suggest you search out a company who has been doing this for a while and also has a good reputation. Stay away from the small time wholesale guy, most of the time they are just trying to sling someone elses property, usually marked up more then average.

Also take the advice form others and read as much as you can.
Curt Davis - KAIZEN Realty538 Reviews
Website View Page
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Bienes Raices
Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
16y
I'm new also, but here's my opinion:

1) easiest, if you have the money, but not always great deals: REO

2) riskier, but potentially more lucrative: buy at auction

3) the most legwork, but potentially the most lucrative: find a distressed property or preforclosure situation that others don't know about yet and convince the person to sell, and then orchestrate the deal.

I'm not sure where buying from a wholesaler fits in on this scale
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Tyler McCracken
Investor · Charlotte, NC · Member since 2010 · 40 posts · 7 votes
16y
One of my favorite landlord books is by David Schumacher with "Buy and Hold" in the title. Think he only wrote two books. Lots of wisdom and basic premises I follow to this day.

From a 16 year landlord.
1 Reply
Sherry Crowther
Real Estate Investor · FL · Member since 2010 · 8 posts · 1 vote
16y
Buying an investment property from someone offering seller financing seems like a good way to go these days. I'm seeing some deals that will give positive cash flows right away.
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David Breitzmann
San Francisco, CA · Member since 2009 · 171 posts · 24 votes
16y
I'd have to say that self reflection and education should be continuous throughout the lifespan.

In terms of expenses, I tend to frequent coffeehouses so most books were read at no cost (other than time).

Learn the different mechanisms but do not become an imitator. There are enough endless copies of synthetic personalities - be original.
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Bryan Hancock
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
16y
Originally posted by NC Mark:
Buy all the books you can afford. Even if you only learn one thing from each it will be money well spent.

I like John T. Reed's books because he's a curmudgeon who doesn't blow happy elevator music up newbie's kilts.

Also, do a site search here as this topic has been addressed before with some great suggestions.

I second this...although I disagree with a lot of what John T. Reed says. His Aggressive Tax Strategies book claims that you shouldn't use entities at all for purchasing property...seems like terrible advice to me.
His recommend/do not recommend list also bashes some that I know to be good authors. He definitely has an agenda on the site.

He does, however, give it to you straight. His article on positive cash flow is one of the best ever written IMO. Take the good with the bad from his stuff. It is a good place to get over guru lollipops and candy dreams.
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Dale Osborn
Mobile Home Investor · Spanaway, WA · Member since 2008 · 1k+ posts · 578 votes
16y
Visit the library and read any and all books available on real estate investing. Robert G. Allen has some pretty informative books. If not available at the library - use the coffee house method mentioned above. Visit Borders or Books a Million and scan through their selections.
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Tracey Williams
Investor · Columbus , OH · Member since 2010 · 311 posts · 51 votes
16y
LIBRARY!!!! library!!! is a good source for books and books on CD,s
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Chris Ross
Real Estate Investor · Montclair, CA · Member since 2010 · 6 posts · 0 votes
16y
Originally posted by Michael C.:
Hello Everyone... new to the website as well as real estate investing... I'm trying to pull together a list of must read books as well as take in suggestions and advice from experienced investors.

What is the best way (when just starting out) to acquire rental properties? I was looking to purchase a 3 - 4 unit multi home and purely rent out then also buy a single home with an in-law type suite which I could rent out... sounds like a good idea but it unfortunately ( I think) prevents me from buying any further rental properties because of available cash.... What's the strategy for acquiring more than two places and and time periods expected?

Any suggestions on reading material as well is appreciated. Thanks.

I would say the best way to start pickin up properties is to do lease options to buy, this way you wouldn't have to come out of your pocket with cash up front.
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Matt Mathews
Real Estate Consultant · yucaipa, CA · Member since 2008 · 233 posts · 109 votes
16y
Other books to read, and read, and read-Real Estate Contracts and Law. Especially in today's market where the rules and laws change almost daily. Also, Find a seasoned mentor that will work with you one on one.
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