Best Starting Point for Beginner Rental Property Investor
New to Real Estate · Suffolk County, NY · Member since 2023 · 1 post · 2 votes
Best Starting Point for Beginner Rental Property Investor
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3yQuote from @Jacob Stengel:
A strong foundational understanding of real estate investing and good financial discipline.
1. Start with BiggerPockets Ultimate Beginners Guide (free). It will familiarize you with the basic terminology and benefits. Then you can read a more in-depth book like The Book On Rental Property Investing by Brandon Turner or The Unofficial Guide to Real Estate Investing by Spencer Strauss.
2. Get your finances in order. Get rid of debt, build a budget, and save. The idea that you can build wealth without putting any money into it is a recipe for disaster and the sales pitch of gurus trying to steal your money. A wise investor will not try to get rich quick with shortcuts. If you can't keep control of your personal finances, you are highly unlikely to succeed in real estate investing. Check out my personal favorite, Set For Life by Scott Trench , or The Total Money Makeover by Dave Ramsey.
3. As you read these books, watch the BiggerPockets podcasts. This will clarify and reinforce what you are reading. You can hear real-world examples of how others have built their investment portfolio and (hopefully) learn to avoid their mistakes.
4. Now you need to figure out how to find deals and pay for them. Again, the BiggerPockets store has some books for this or you can learn by watching podcasts, reading blogs, and interacting on the forum. There is a handy search bar in the upper right that makes it easy to find previous discussions, blogs, podcasts, and other resources. BiggerPockets also has a calculator you can use to analyze deals and I highly recommend you start this as soon as possible, even if you are not ready to buy. If you consistently analyze properties, it will be much easier to recognize a good deal when it shows up. Find Brandon's videos on YouTube for the "four square" method of analyzing homes and practice. It doesn't take long to learn how to spot a good deal.
5. Study the market. You can learn to do this on your own or get a rockstar REALTOR to lead the way. I highly recommend a well-qualified REALTOR that works with investors and knows how to best help you.
6. Jump in! Far too many get stuck in the "paralysis by analysis" stage, thinking they just don't know enough to get started. The truth is, you could read 100 books and still not know enough because certain things need to be learned through trial-and-error. You don't need to know everything to get started; you just need a foundation to build on and the rest will come through experience and then refining your education.
You can build a basic understanding of investing in 3-6 months. How long it takes to be financially ready is different for everyone. Once you're ready, create a goal (e.g. "I will buy at least one single-family home, duplex, triplex, or fourplex before the end of 2019") and then do it. Real estate investing is a pretty forgiving world and the average person can still make money even with some pretty big mistakes.
The DIY Landlord Book4.7247 Reviews
8 Replies
- Investor · DFW, TX · Member since 2022 · 198 posts · 161 votes3y
A couple more things you might want to be doing:
Shopping for a lender. Some are better for investors than others.
Shopping for a realtor. Some are better for investors than others.
- Real Estate Agent · Member since 2018 · 459 posts · 414 votes3y
Talking to a lender would probably be the first one I would do if I were in your position. A good lender is going to help look at your entire financial picture and help you determine what your buying point is at and what things you can do to improve your buying power (credit, debt pay down, income, etc).
Find a good agent is important too. They’ll be your deal finder and negotiate on your behalf.
But you can always be analyzing deals on the MLS as practice. The more you do the better you'll get a knowing what is a good deal and what's a lemon.
Get involved in your local REI meetups! Talk to other investors and see what they're doing and see how you can help them out 👍
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes3y
Quote from @Jacob Stengel:
A strong foundational understanding of real estate investing and good financial discipline.
1. Start with BiggerPockets Ultimate Beginners Guide (free). It will familiarize you with the basic terminology and benefits. Then you can read a more in-depth book like The Book On Rental Property Investing by Brandon Turner or The Unofficial Guide to Real Estate Investing by Spencer Strauss.
2. Get your finances in order. Get rid of debt, build a budget, and save. The idea that you can build wealth without putting any money into it is a recipe for disaster and the sales pitch of gurus trying to steal your money. A wise investor will not try to get rich quick with shortcuts. If you can't keep control of your personal finances, you are highly unlikely to succeed in real estate investing. Check out my personal favorite, Set For Life by Scott Trench , or The Total Money Makeover by Dave Ramsey.
3. As you read these books, watch the BiggerPockets podcasts. This will clarify and reinforce what you are reading. You can hear real-world examples of how others have built their investment portfolio and (hopefully) learn to avoid their mistakes.
4. Now you need to figure out how to find deals and pay for them. Again, the BiggerPockets store has some books for this or you can learn by watching podcasts, reading blogs, and interacting on the forum. There is a handy search bar in the upper right that makes it easy to find previous discussions, blogs, podcasts, and other resources. BiggerPockets also has a calculator you can use to analyze deals and I highly recommend you start this as soon as possible, even if you are not ready to buy. If you consistently analyze properties, it will be much easier to recognize a good deal when it shows up. Find Brandon's videos on YouTube for the "four square" method of analyzing homes and practice. It doesn't take long to learn how to spot a good deal.
5. Study the market. You can learn to do this on your own or get a rockstar REALTOR to lead the way. I highly recommend a well-qualified REALTOR that works with investors and knows how to best help you.6. Jump in! Far too many get stuck in the "paralysis by analysis" stage, thinking they just don't know enough to get started. The truth is, you could read 100 books and still not know enough because certain things need to be learned through trial-and-error. You don't need to know everything to get started; you just need a foundation to build on and the rest will come through experience and then refining your education.
You can build a basic understanding of investing in 3-6 months. How long it takes to be financially ready is different for everyone. Once you're ready, create a goal (e.g. "I will buy at least one single-family home, duplex, triplex, or fourplex before the end of 2019") and then do it. Real estate investing is a pretty forgiving world and the average person can still make money even with some pretty big mistakes.
The DIY Landlord Book4.7247 Reviews - Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes3y
Hey @Jacob Stengel - I'm an investor & realtor and understand where you're coming from in terms of feeling like you're not "doing much"
In reality, you already are doing a lot just by putting yourself out there and posting on forums like BP! In terms of what else you can do to start to gain some traction, you can definitely start talking to realtors and lenders to get a good idea of things are shifting in the market.
One thing that is *super* helpful for most new investors is to attend at least 1 local real estate investing meetup (most are free, some are paid) and be around other people in real estate. The meetups are incredibly helpful to not just meet others that are doing what you're doing, but also help you connect the dots by being exposed to those very same people. You might leave a good real estate networking event with enough connections to make your first deal happen.
Shoot me a DM if you want to chat further, I'm a househacker too — happy to share the mistakes I've made too to save you some trouble.
Quote from @Jacob Stengel:
Hey BiggerPockets community! I'm getting into real estate investing and have been reading up and saving money to hopefully buy my first rental property this year. My goal is to start by using the house hacking strategy on a single family home. Although I'm learning a lot from books, videos, and podcasts, I feel like I'm not doing much to actually prepare for it. Can anyone provide suggestions on ways to actively prepare or gain hands-on experience as I embark on this journey? Thanks for the help!
Stop reading books. Go to your local RE meeting and connect with those doing deals vs reading. You will learn more in a week then you will in a year reading. Its exactly how I started. BTW I was born and raised in Blue Point. My 1st deal after only 3 weeks, was flipping a contract for 19k in Bayshore. Buying and renting in LI is not going to provide great cash flow. Price and taxes much too high, this is what I moved to FL and now live in SC. I do all my business in the Cleveland markets the last 10 years,,,,,,,
There are meetings all over LI, I know there is a good one in Brighwaters, I forget his name , hes on BP as well. GO LEARN, then apply what you learn,
All the best
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes3y
Quote from @Jacob Stengel:
Hey BiggerPockets community! I'm getting into real estate investing and have been reading up and saving money to hopefully buy my first rental property this year. My goal is to start by using the house hacking strategy on a single family home. Although I'm learning a lot from books, videos, and podcasts, I feel like I'm not doing much to actually prepare for it. Can anyone provide suggestions on ways to actively prepare or gain hands-on experience as I embark on this journey? Thanks for the help!
Welcome aboard Jacob.
- 3ySuzanne PlayerPro MemberAttorney · New York City / Long Island, NY · Member since 2020 · 597 posts · 248 votes
I think a lot of people think it's premature to talk to lenders before they have their downpayment ready, but I would say it's not too early
Feel free to message me if you would like referrals of knowledgable & experienced local mortgage brokers / bankers
- Member since 2023 · 12 posts · 4 votes3y
Long Island is a challenging market. It is blessed with an abundance of cash buyers with deep pockets so developing a buying strategy for your goals is key. Market observations: retail buyers are over-bidding on as-is houses in certain areas on the Island. Using the term cash buy in a NY just means you will waive the mortgage contingency. Some folks are waiving appraisals and inspections. Inspections are necessary. Most houses on the Island are OLD and need maintenance. Things to be aware of: NY Landlord law favors tenants. Evictions are hard. Foreclosures can be delayed by around 15 years depending on how homeowners manipulate NY bankruptcy law. Think of it like they stopped paying one year and the bank files lis pendins/pre-forecloses then Spouse A declares bankruptcy first, which delays foreclosure then 7 years later Spouse B declares Bankruptcy which delays foreclosure another 7 years. That's 15 years of living "mortgage free " in NY. Short-sales are a thing in Long Island but it damages the "sellers" credit. Subject to existing finance deals are possible but hard. Attorneys often talk their clients out of it which is sad especially when that client eventually loses the home to foreclosure. Homeowners sometimes damage the property before leaving it. NYS is an attorney state. Realize some real estate attorneys on the island are more obstructive than helpful. Earnest Money Deposits are typically 10 percent but that can and should be negotiated down. Closing costs are about 3 percent of purchase price if paying cash, 5 % if financing. That's money above and beyond purchase price. Property tax varies across Long Island. Taxes are high. Labor costs for rehabs and maintenance are high. Every county assessor office monitors low-income areas on the Island. Every county has a plan for future development. If you own a home that is vacant that Suffolk or Nassau county assesses as unsafe, they can and will demolish the home and bill the homeowner for the demolition by placing a lien on the property. Buildable lots are rare on Long Island. Termite damage is a very real thing often revealed during kitchen remodeling. Long Island has both septic and sewer lines. Septic is more common than sewer. Septic laws have changed and must be placed in front of the house for new builds. Best low tax areas to consider in Long Island are closer to the Hamptons. Hope this was helpful.
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