{"id":93167,"date":"2020-01-12T12:00:05","date_gmt":"2020-01-12T19:00:05","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=93167"},"modified":"2021-03-16T13:41:55","modified_gmt":"2021-03-16T19:41:55","slug":"3-things-purchasing-your-first-property","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/3-things-purchasing-your-first-property","title":{"rendered":"3 Things to Remember When Purchasing Your First Investment Property"},"content":{"rendered":"<p>I\u2019m going to be talking about three things you must consider before you buy your first property. OK, let\u2019s get to the vlog.<\/p>\n<h3>What to Consider Before You Buy Your First Property<\/h3>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/L9U9QDg8DFQ\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h3>1. Do Business With Like-Minded People<\/h3>\n<p>In my opinion, the first thing you need to do before you buy your first property is make sure that you are working with the right people. There\u2019s a saying, and it goes like this, \u201cBusiness is easy; people make it difficult.\u201d<\/p>\n<p>You have to establish trust and relationships with people who are going to have the same big-picture as you. These people cannot be about instant gratification; they must be about delayed gratification. I say this because real estate is a long-term play. It takes five, 10, or 15 years to truly build a large and sustainable portfolio.<\/p>\n<p>You do not want to work with someone who is all about getting your money right now and then just moving on to another deal (or to another individual).<\/p>\n<p><em><strong>Related:<\/strong> <a href=\"\/renewsblog\/2014\/08\/16\/tips-beginner-real-estate-investors\/\" target=\"_blank\" rel=\"noopener noreferrer\">12 Simple Steps for Beginner Real Estate Investors<\/a><\/em><\/p>\n<p>Really make sure that you have the right people surrounding you\u2014whether it be an attorney, a property manager, a rehab crew, a maintenance guy, a title company, or a Realtor. Whoever it is that you need to work in real estate successfully, those are the people you should surround yourself with.<\/p>\n<p>This goes for investing in your local market (like in your backyard), out of state, or even out of \u00a0the country.<\/p>\n<h3>2. Drive a Bargain<\/h3>\n<p>The second biggest mistake that a lot of investors make is that they pay <em>way<\/em> too much for properties. Guys, what I\u2019m about to tell you, never forget. <strong>You make money when you buy and not when you sell<\/strong>. So stop paying too bloody much for investment properties.<\/p>\n<p>I mean, it is the most ridiculous thing I\u2019ve ever seen. Look, I made a big mistake when I first started. I was building my portfolio based on quantity. I wanted to be able to classify myself as this real estate entrepreneur and guru and whatnot, but I really wasn\u2019t thinking about <em>why<\/em> I was investing in real estate.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-106316\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/01\/home-for-sale.jpg\" alt=\"property, for sale, real estate, investment, reinvestment\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/01\/home-for-sale.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/01\/home-for-sale-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<p>At that point, I was just buying for the purpose of buying, and that was a huge mistake.<\/p>\n<p>What you ultimately want to do is buy the right house in the right area for the right price. Buy a house that needs the right amount of work. This way, the property can actually get you a step closer to your end goals.<\/p>\n<p>If you strategically purchase properties to meet your end goals and cash flow criteria, you really don&#8217;t need much quantity to your portfolio. You can buy five, 10, or 15 single family homes; you can sell out of that package; you can purchase one <a href=\"https:\/\/www.biggerpockets.com\/blog\/2013\/04\/09\/how-to-buy-a-small-multifamily-property\/\" target=\"_blank\" rel=\"noopener noreferrer\">multifamily deal<\/a> that will literally give you <a href=\"https:\/\/www.biggerpockets.com\/blog\/2016\/03\/28\/financial-freedom\/\" target=\"_blank\" rel=\"noopener noreferrer\">financial freedom<\/a>!<\/p>\n<p>I kid you not, because I\u2019m actually in the process of doing that right now. So, just to summarize here guys, negotiate hard, be patient, buy cheap, and only pull the trigger when all of the above make sense.<\/p>\n<h3>3. Start Small<\/h3>\n<p>Last but not least, stop buying properties that need way too much work. I mean seriously, guys, if you have never done a deal in your life\u2014if this is the first deal you are even looking at doing\u2014why the hell would you even consider buying a $14 million <a href=\"https:\/\/www.biggerpockets.com\/blog\/2013\/05\/15\/commercial-real-estate-investing\/\" target=\"_blank\" rel=\"noopener noreferrer\">commercial property<\/a> in the heart of New York City?<\/p>\n<p>Hello! Start off small.<\/p>\n<p><em><strong>Related:<\/strong> <a href=\"\/renewsblog\/negotiate-successfully\/\" target=\"_blank\" rel=\"noopener noreferrer\">13 Tips for Skillful Real Estate Negotiation<\/a><\/em><\/p>\n<p>Buy a property that just needs a cosmetic rehab: paint, carpet, landscaping, new light fixtures. I already mentioned that you make money when you buy and not when you sell. I personally believe that no matter how hot any market is, if you are patient, if you know where to look, if you have some lead generation strategies to acquire properties, you can make money in any market.<\/p>\n<p>You may need to work a little harder, but it comes down to how much you pay for that property.<\/p>\n<h2>Conclusion<\/h2>\n<p>So, please make sure that when you do buy these properties, you don&#8217;t buy one that needs structural renovation work, a complete floor plan rearrangement, or development approval from the city. Guys, if you do, you\u2019re kidding yourself.<\/p>\n<p>Buy cheap. Buy a property that simply needs a cosmetic rehab. Get in and out as quickly as you can, because time is money. You\u2019ll probably make a ton of mistakes, but learn from those mistakes. Do not repeat them in the second deal.<\/p>\n<p>And I\u2019ll tell you this, the least amount of money you invest in your first investment, the better. Investing less means less risk. Even if that means buying a property in a very rough area, I still think you should consider it. You will learn a lot from that experience.<\/p>\n<p>That pretty much concludes my vlog for today. I hope you enjoyed it.<\/p>\n<p><a href=\"https:\/\/www.biggerpockets.com\/real-estate-investment-calculator?utm_source=renewsblog\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-91220\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-02.jpg\" alt=\"\" width=\"700\" height=\"85\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-02.jpg 700w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-02-300x36.jpg 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<p><em>Do you know of any other pitfalls that I missed in this post?<\/em><\/p>\n<p><strong>Post them in the comments below.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Avoid beginners&#8217; mistakes by considering these three very important points before you purchase your first investment property.<\/p>\n","protected":false},"author":1672,"featured_media":115030,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5524],"tags":[],"class_list":["post-93167","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\/93167","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=93167"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/93167\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/115030"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=93167"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=93167"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=93167"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}