{"id":120692,"date":"2019-12-22T12:00:44","date_gmt":"2019-12-22T19:00:44","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=120692"},"modified":"2021-03-16T14:57:41","modified_gmt":"2021-03-16T20:57:41","slug":"do-not-overpay-investment-property","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/do-not-overpay-investment-property","title":{"rendered":"4 Tips to Avoid Overpaying for Your First Investment Property"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Let&#8217;s talk about how to invest in your first investment property without overpaying.\u00a0<\/span><\/p>\n<h2>4 Ways to Ensure You Won&#8217;t Overpay<\/h2>\n<h3>1. Be patient.<\/h3>\n<p><span style=\"font-weight: 400;\">First, I want to talk to you about how when I started my journey as a real estate investor, I made a lot of mistakes. One of the mistakes was being impatient. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">I was just buying properties for the purpose of adding properties to my portfolio, so I could call myself a grand real estate investor. But I wasn\u2019t really generating a better life for me and my loved ones.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Thankfully, I woke up and smelled the roses and sold out of that portfolio. Then, I restarted my real estate investment journey. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">The message for you is this: You have to be patient when you start your real estate investment journey. Be very patient; don\u2019t rush in and don\u2019t jump into it.\u00a0<\/span><\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/ZF9Nws_0bys\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h3>2. Surround yourself with knowledgeable people.<\/h3>\n<p><span style=\"font-weight: 400;\">The second thing is figuring out how to not overpay for a property. I think you need to surround yourself with the right people. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">I\u2019ve said it before, and I\u2019ll say it again. I\u2019ve done hundreds of videos, and I always keep talking about this. I\u2019m literally like a broken record. <\/span><\/p>\n<p><span style=\"font-weight: 400;\"><em>Teamwork makes the dream work.<\/em> <\/span><\/p>\n<p><span style=\"font-weight: 400;\">People like real estate agents, real estate attorneys, title companies, accountants, property managers, appraisers, building inspectors, contractors, and maintenance people are going to be your mentors. Other successful real estate investors are going to be your mentors, too. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">You have to surround yourself with these people. So, <a href=\"https:\/\/www.biggerpockets.com\/forums\/521-events-and-happenings\" target=\"_blank\" rel=\"noopener noreferrer\">spend time networking<\/a>, shaking hands, and kissing babies. Go to real estate events, <a href=\"https:\/\/www.biggerpockets.com\/forums\" target=\"_blank\" rel=\"noopener noreferrer\">post on online forums<\/a>, and ask questions. Spend money on lunches, dinners, and coffees. The best investment is investing in yourself.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">I\u2019m not saying to buy DVDs, courses, and masterminds. That\u2019s all fake guru crap. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">I\u2019m talking about going and talking to people that are actually out there and doing it every single day. And they won\u2019t be hard to find, because you will see them in the trenches doing the work.<\/span><\/p>\n<p><strong><em>Related:<\/em><\/strong> <em><a href=\"https:\/\/www.biggerpockets.com\/blog\/buy-and-hold-dream-team\" target=\"_blank\" rel=\"noopener noreferrer\">How to Build Your Buy and Hold Dream Team<\/a><\/em><\/p>\n<p><span style=\"font-weight: 400;\">When you meet these people and talk to them, you need to realize that they will ultimately be your eyes and ears, your heart and soul, if they\u2019re in a region you want to be investing in. They\u2019ll be the ones that will mold your opinion when it comes to real estate investing and give a lot of real estate insight in regard to everything that\u2019s happening in that area. From the price points to the market valuations, they\u2019ll provide insight. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Remember, teamwork makes the dream work, and network your butt off.\u00a0<\/span><\/p>\n<h3>3. Get familiar with your market.<\/h3>\n<p><span style=\"font-weight: 400;\">You also have to become an expert in the particular region you\u2019re interested in. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">We\u2019ve talked about talking to a lot of people. Now let\u2019s talk about some of the data, stats, and analytics.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-114450 size-main-slider\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/financial-research-702x336.jpg\" alt=\"computer-research\" width=\"702\" height=\"336\" title=\"\"><\/p>\n<p><span style=\"font-weight: 400;\">Immerse yourself in anything and everything that you possibly can find online when it comes to what properties are selling for on the MLS:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">What are the price points? <\/span><\/li>\n<li><span style=\"font-weight: 400;\">What are renovated properties selling for? <\/span><\/li>\n<li><span style=\"font-weight: 400;\">What are distressed properties selling for? <\/span><\/li>\n<li><span style=\"font-weight: 400;\">What are properties renting for? <\/span><\/li>\n<li><span style=\"font-weight: 400;\">How much can you buy a distressed property for? <\/span><\/li>\n<li><span style=\"font-weight: 400;\">What can you sell a renovated property for? <\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Check out Craigslist and Facebook. Basically, leave no stone unturned. I want you to become a master in the market on everything that is going on in that particular area. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">You\u2019re going to get a lot of insight from the people that you\u2019re meeting with. But you&#8217;re also going to get a lot from educating yourself on all the online stats, demographics, and comparable sales. Then, in my opinion, after a decent amount of time, you will become a market expert. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">You\u2019ll know the true value of a renovated property and what a bargain is when you see it. Then you can make a decision very quickly, because you understand the market value.\u00a0<\/span><\/p>\n<h3>4. Once again, be patient.<\/h3>\n<p><span style=\"font-weight: 400;\">I can&#8217;t emphasize this one enough, you have to be patient. I\u2019ve done over 1,000 deals, and we offer on 100-plus deals every week. But we only buy a handful of properties.<\/span><\/p>\n<p><strong><em>Related:<\/em><\/strong> <em><a href=\"https:\/\/www.biggerpockets.com\/blog\/2015-06-15-build-real-estate-investing-career-camp-fire\" target=\"_blank\" rel=\"noopener noreferrer\">5 Real Estate Investing Lessons Learned From Building a Campfire<\/a><\/em><\/p>\n<p><span style=\"font-weight: 400;\">I only buy when the price is right, I know I can make a good profit, and I can still deliver a good product to my investor for fair market value with a good <a href=\"https:\/\/www.biggerpockets.com\/blog\/cap-rate-real-estate\" target=\"_blank\" rel=\"noopener noreferrer\">cap rate<\/a> in place. So again, be patient. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">When one door closes, another door opens. Just wait for the right deal to come along in the right area that you can buy for the right price and that needs the right amount of rehab. And make sure you know you can make a good profit margin and a good return on investment if you\u2019re buying and holding.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In my opinion, that\u2019s the only recipe where you\u2019re not going to overpay for property. If you think you\u2019re an expert just because you\u2019ve read one article and saw one video\u2014and now you\u2019re going to go to the market and buy a property\u2014you\u2019ll probably lose your butt and overpay. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you spend a year doing what I\u2019m recommending, there is no chance that you\u2019re going to overpay. Then, if you&#8217;re patient on top of that and wait for the right house, I really don\u2019t see how you\u2019re going to overpay on your first property.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Guys, that\u2019s my advice to you. Take it or leave it. <\/span><\/p>\n<p><a href=\"https:\/\/www.youtube.com\/user\/BiggerPockets\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-114268\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6.jpg\" alt=\"ad-youtube-channel\" width=\"706\" height=\"125\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6.jpg 706w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6-300x53.jpg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6-702x125.jpg 702w\" sizes=\"auto, (max-width: 706px) 100vw, 706px\" \/><\/a><\/p>\n<p><em><span style=\"font-weight: 400;\">Am I right? Am I wrong?<\/span><\/em><\/p>\n<p><span style=\"font-weight: 400;\"><strong>I\u2019d love to hear from you in a comment below.<\/strong><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you think you\u2019re an expert real estate investor just because you\u2019ve read one article and saw one video\u2014and now you\u2019re going to go to the market and buy a property\u2014you\u2019ll probably lose your butt and pay too much. Follow this recipe instead, and you\u2019re not going to overpay for your first property. <\/p>\n","protected":false},"author":1672,"featured_media":118606,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5524],"tags":[],"class_list":["post-120692","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\/120692","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\/1672"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=120692"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/120692\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/118606"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=120692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=120692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=120692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}