{"id":102932,"date":"2019-10-27T09:00:29","date_gmt":"2019-10-27T15:00:29","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=102932"},"modified":"2021-03-16T14:50:46","modified_gmt":"2021-03-16T20:50:46","slug":"simple-steps-purchase-rental-properties","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/simple-steps-purchase-rental-properties","title":{"rendered":"4 Simple Steps Anyone Can Use to Purchase Rental Properties"},"content":{"rendered":"<p>Rental properties are one of the greatest investments out there. But just buying any ole property is a recipe for disaster. You&#8217;ve got know what you are doing.<\/p>\n<p>So, I want to walk you through <em>exactly<\/em> how I find, finance, and purchase my rental properties\u2014so you can do the same!<\/p>\n<p>Over the past decade, I\u2019ve purchased nearly 100 rental units, spread out over a couple dozen different properties\u2014some single family houses, some multifamily, and even a mobile home park.<\/p>\n<p>I\u2019ve made a lot of mistakes, but I\u2019ve also hit some home runs, so in this blog post, allow me to walk through the four-step process I\u2019ve learned works best for purchasing rental properties.<\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/wEy7MC7adC0\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h2>4 Simple Steps Anyone Can Use to Purchase Rental Properties<\/h2>\n<h3>1. Define what you want.<\/h3>\n<p>Step one in purchasing rental properties is to <em>define what you want.<\/em><\/p>\n<p>Are you looking for <a href=\"\/renewsblog\/2015\/04\/20\/how-to-100000-dollars-year-real-estate\/\" target=\"_blank\" rel=\"noopener noreferrer\">a cheap fixer-upper<\/a>? A nice duplex? A 500-unit apartment complex on the beach?<\/p>\n<p>I really believe that most success in life can be boiled down to two simple steps:<\/p>\n<ol>\n<li>Know what you want.<\/li>\n<li>Hustle until you get it.<\/li>\n<\/ol>\n<p>That\u2019s why it\u2019s important to define exactly what you want.<\/p>\n<p>And remember: not every property type works for every area, and not every area works for every strategy. So either find what works in your local area, or find an area that fits what you want to do!<\/p>\n<p>When I got started, I decided that I wanted to buy mostly <a href=\"\/renewsblog\/2013\/04\/09\/how-to-buy-a-small-multifamily-property\/\" target=\"_blank\" rel=\"noopener noreferrer\">small multifamily properties<\/a>\u2014duplexes, triplexes, etc. And so I did.<\/p>\n<p>What are you going to go after?<br \/>\n<em><br \/>\n<strong>Related:<\/strong> <a href=\"\/renewsblog\/should-you-buy-a-rental-property-if-you-have-existing-debt\/\" target=\"_blank\" rel=\"noopener noreferrer\">Should You Buy a Rental Property if You Have Existing Debt?<\/a><\/em><\/p>\n<h3>2. Arrange your financing.<\/h3>\n<p>Now, granted, step two and three could be done in any order, but I like knowing where my financing is coming from before I hunt for deals.<\/p>\n<p>I\u2019ve used a variety of strategies for financing my rental property purchases:<\/p>\n<ul>\n<li>I\u2019ve used traditional 20% down loans from local banks<\/li>\n<li>I\u2019ve used partners to fund the down payment, allowing me to do it for no money down<\/li>\n<li>I\u2019ve used seller financing<\/li>\n<li>I&#8217;ve used lease options<\/li>\n<li>I&#8217;ve used commercial loans<\/li>\n<\/ul>\n<p>I&#8217;ve also used even more methods\u2014because there are a ton of ways to finance deals. I like to think of it like a tool box. The more tools you have in your toolbox, the more projects you can take on. In the same way, the more financing tools you are aware of in your mental toolbox, the more properties you can buy!<\/p>\n<p>(For more on the creative side of real estate finance, check out my first book\u00a0<em><a href=\"https:\/\/www.biggerpockets.com\/store\/no-money-down-ultimate\" target=\"_blank\" rel=\"noopener noreferrer\">The Book on Investing in Real Estate with No (and Low) Money Down<\/a><\/em>.)<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-114539 size-main-slider\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2018\/10\/rental-keys-702x336.jpg\" alt=\"Hand with house key in foreground, living room with light wood floors, white couch and white shelves in background\" width=\"702\" height=\"336\" title=\"\"><\/p>\n<h3>3. Hunt for deals.<\/h3>\n<p>And yes, in today\u2019s competitive market, you have to go hunt. They don\u2019t just lie down on your doorstep, begging to come in.<\/p>\n<p>The strategy behind hunting for real estate deals is actually fairly simple. I use the acronym LAPS to describe it:<\/p>\n<ul>\n<li>Get <strong>leads<\/strong><\/li>\n<li><strong>Analyze<\/strong>\u00a0them<\/li>\n<li><strong>Pursue<\/strong> them<\/li>\n<li>And find <strong>Success<\/strong><\/li>\n<\/ul>\n<p>Now, leads can come from anywhere:<\/p>\n<ul>\n<li>Real estate agents<\/li>\n<li>Websites like Realtor.com or Zillow.com<\/li>\n<li>Direct mail marketing<\/li>\n<li>Craigslist<\/li>\n<li>Word of mouth<\/li>\n<li>Whatever else<\/li>\n<\/ul>\n<p>And once you start getting lots of leads, you start analyzing them to find out how much you can pay. Then, go after the ones that you like. And if you are consistent and persistent enough with this process, you\u2019ll eventually find success.<\/p>\n<p>(Of course, check out <a href=\"https:\/\/www.biggerpockets.com\/calc\" target=\"_blank\" rel=\"noopener noreferrer\">The BiggerPockets Investment Calculators<\/a> to see how easy it is to run the numbers on any rental, flip, wholesale, or <a href=\"\/renewsblog\/2015\/04\/20\/how-to-100000-dollars-year-real-estate\/\" target=\"_blank\">BRRRR deal<\/a> in under five minutes.)<\/p>\n<p>And that leads to the final step&#8230;<\/p>\n<h3>4. Purchase your rentals!<\/h3>\n<p>At this stage, you\u2019ll need to use a local title company or an attorney (in a few weird states) to do a title search and handle all the paperwork.<\/p>\n<p>The title company pulls everything together and makes it nice and organized. They work with the lender, any agents involved, and you and the seller. They tie everything together to help get you the keys.<\/p>\n<p>And that\u2019s how I purchase rental properties\u2014and how you can start doing the same. But before you leave, let me give you three quick action steps you can implement today:<\/p>\n<ol>\n<li>Head over to Realtor.com or Zillow.com and start checking out some properties.<\/li>\n<li>Try running the numbers on one of those properties using the <a href=\"https:\/\/www.biggerpockets.com\/calc\" target=\"_blank\" rel=\"noopener noreferrer\">Biggerpockets Rental Property Calculator<\/a>. Remember what your momma told you: Practice makes perfect. So start running the numbers daily until you feel comfortable to start building your empire.<\/li>\n<li>And third, if you liked this blog post, don\u2019t forget to share it to help others learn how to purchase rental properties, too!<\/li>\n<\/ol>\n<p><em><strong>Related:<\/strong> <a href=\"\/renewsblog\/financing-investment-properties\" target=\"_blank\" rel=\"noopener noreferrer\">What Newbies Should Know About Financing Investment Properties (Versus Homes)<\/a><\/em><\/p>\n<p><a href=\"https:\/\/www.biggerpockets.com\/store\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-114267\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/5.2.jpg\" alt=\"ad-bookstore\" width=\"706\" height=\"125\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/5.2.jpg 706w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/5.2-300x53.jpg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/5.2-702x125.jpg 702w\" sizes=\"auto, (max-width: 706px) 100vw, 706px\" \/><\/a><\/p>\n<p><em>What questions do you have about landing your first rental property?<\/em><\/p>\n<p><strong>Leave them below!<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Over the past decade, I\u2019ve purchased a ton of rental units spread out over a couple dozen different properties\u2014some single family houses, some multifamily, and even a mobile home park. I want to walk you through exactly how I find, finance, and purchase my rental properties, so you can do the same!<\/p>\n","protected":false},"author":710,"featured_media":114417,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5524],"tags":[],"class_list":["post-102932","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing-for-beginners"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/102932","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/710"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=102932"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/102932\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/114417"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=102932"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=102932"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=102932"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}