Looking to purchase first Rental property (need help)
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Investor · Tampa, FL · Member since 2019 · 1k+ posts · 1k+ votes
2yQuote from @Nay Russ:
Hello Everyone!
We are looking to purchase are first rental property to generate extra income. We eventually want to keep purchasing more and hold multiple properties. I am willing to study and learn all I can about the industry. Can anyone point us in the direction of learning materials for beginners? We live in Virginia and multi families are not abundant here, and when we do come across one they are either too expensive and the rent would just be paying the mortgage. We are looking to be OOS investors. What states are good that are not super expensive were the property will appreciate but will also be able to bring in a monthly income? We are looking to take money out of our current home to help fund this first purchase.
Thank you all in advance!
It's not easy, but I'm still able to find off-market properties in Florida that meet the 1% rule. In fact, I'm about to start promoting a property in Kissimmee, FL, where I was able to secure seller financing under contract with a 40-year amortization at 3.5%, and a balloon payment due in year 20. This results in a principal and interest of $1,181/month, while the market rent is $2,100/month, and the property is rent-ready.
38 Replies
- Rental Property Investor · Oconomowoc, WI · Member since 2016 · 996 posts · 431 votes2y
@Nay Russ The Midwest is a good opportunity zone right now. Oklahoma, Iowa and Wisconsin are some of the best. Steer clear of MN and IL (no offense to anyone currently investing there!), I'm from Wisconsin and we do have some good markets particularly the "sleeper" ones that are not gaining national attention.
- Real Estate Agent · Madison, WI · Member since 2021 · 60 posts · 33 votes2y
Hi Nay, congrats on taking the the steps to purchase your first investment property! I am an investor and real estate agent in Madison, WI. I agree with @Corina Eufinger that Wisconsin is a great place to invest in everything from buy and hold multi-families, mid-term rentals, short term rentals, flips, etc. I'm happy to discuss your goals and see what could be a good fit.
- Realtor · Fort lauderdale, FL · Member since 2021 · 3 posts · 3 votes2ywhat research and stats do you usually look at in order to find the markets first and ride the wave up?
Quote from @Tim Ryan:
Hi Nay, see the comment by @Rebecca Knox. She nailed it. I live in LA and invest out of state. Currently in SE Wisconsin. Think about this for a moment: how many people have mentioned this market? Don't we usually hear Columbus and Cleveland? And years past is was Dallas and Houston... My strategy since 2009 has been to go into markets early (even first) and ride the wave up. There needs to be research behind it of course so you are confident the market will grow. Let me know if you'd like to connect and I can give more info.
- 2yBryon AndrewsBusiness MemberReal Estate Agent · Saint Paul, MN · Member since 2018 · 201 posts · 104 votes
Hi @Nay Russ I invest in both MN and WI. Both are great markets. Yes, the market is important for your specific investing goals and criteria, but I would stress that it is even more important to have the right team in the location that you plan to invest in. You can buy a perfect deal on paper, but if you don't have the proper "boots on the ground" to manage the property for you, you are likely in for a headache.
If you haven't already, read Rich Dad Poor Dad, and the Millionaire Next Door.
- 2yMatt McCurdyBusiness MemberReal Estate Broker · Cedar Rapids, IA · Member since 2019 · 143 posts · 56 votes
Quote from @Nay Russ:
Hello Everyone!
We are looking to purchase are first rental property to generate extra income. We eventually want to keep purchasing more and hold multiple properties. I am willing to study and learn all I can about the industry. Can anyone point us in the direction of learning materials for beginners? We live in Virginia and multi families are not abundant here, and when we do come across one they are either too expensive and the rent would just be paying the mortgage. We are looking to be OOS investors. What states are good that are not super expensive were the property will appreciate but will also be able to bring in a monthly income? We are looking to take money out of our current home to help fund this first purchase.
Thank you all in advance!
Hey Nay,
I'm from Cedar Rapids, Iowa and I really like the market here in terms on real estate investing. I'd be happy to share more details/answer questions. I'll DM you.
- Little Elm, TX · Member since 2014 · 356 posts · 47 votes2y
Quote from @Devante S.:
Hey Nay, excited for you to start your journey! Hoping I can help you two out a bit here.
Whether you choose to purchase your first multifamily or single family income generating property, a major key you're going to want to know is not to bite off anything you can't chew so you don't find yourself in extraneous debt positions and overly large rehab projects or timelines. When you're just looking to start investing but don't have unlimited capital, I've seen a not-so-common but very successful method of scanning small town, seasonal, or rural markets (off-market preferred) that have older homes needing an easy facelift. (New carpets, Siding, Paint, maybe just a few appliances)
The reason being is that many (many) people seem to forget that rental housing is incredibly hard to come by in small towns or outskirts of cities where the primary industries are medical clinics, restaurants, bars, farms, and factories. A lot of independent contractors or blue collar workers reside in these areas as well (trade skills are prevalent). If you haven't seen it already in your area, midwestern investment groups (The big guys) are just starting to catch on in the last 2 years as more 100-250+ unit buildings are going up in these towns. But newer investors have an opportunity to take care of small town communities and provide housing for those who work often but aren't ready to settle down.
I've helped a good friend purchase an older and larger farmhouse in rural Wisconsin, which he then flipped it into two units by rehab and adding a second entry way. By the time he was ready to lease the applications came in quickly due to the rent being more affordable than inner city units and fulfilling a great need for rental housing in the more rural areas or outskirts of town. After a few years you could likely sell to a new investor or even a long term tenant while moving on to other adventures. These are all just possibilities on ways I've seen people get a foot in the door in this market.
If you're looking for good materials learning how to get started I've put together a leasing guide for new or self-managing landlords/investors. Its 22 pages, step by step on how to actually lease your property, and straight to the point. I also make myself available for people who use the guide to answer questions by phone while you learn how to get your properties rented. Connect with me if you're interested and good luck!!
I'd like a copy of this guide! :)
- Investor · WI · Member since 2020 · 32 posts · 15 votes2y
Hi Erin, Absolutely! I'll reach out on messages to get your email.
- Real Estate Broker · Milwaukee, WI · Member since 2015 · 299 posts · 90 votes2y
Quote from @Michael Smythe:
@Nay Russ you might also want to consider Detroit
https://michiganchronicle.com/2024/01/03/major-developments-that-will-define-detroit-in-2024/
More importantly, trust NO ONE!
Ask a lot of questions and do your own research.
Otherwise, you'll just get taken advantage of:(
Especially if you win the Superbowl!
- Investor · Fresno, CA · Member since 2016 · 222 posts · 237 votes2y
Quote from @Nay Russ:
Hello Everyone!
We are looking to purchase are first rental property to generate extra income. We eventually want to keep purchasing more and hold multiple properties. I am willing to study and learn all I can about the industry. Can anyone point us in the direction of learning materials for beginners? We live in Virginia and multi families are not abundant here, and when we do come across one they are either too expensive and the rent would just be paying the mortgage. We are looking to be OOS investors. What states are good that are not super expensive were the property will appreciate but will also be able to bring in a monthly income? We are looking to take money out of our current home to help fund this first purchase.
Thank you all in advance!
Hey Nay,
Well you've obviously come to the right place! We're all here on BP because we have a passion for, interest in, and belief in the life changing potential of real estate.
I want to chime in as someone that is still rather new as an investor, but has managed to get over the initial stages. If you're an analytical person and like to have everything planned out thoroughly realize that that can be an amazing strength, but also a huge weakness. Every strength is a weakness and vice versa depending on context and perspective. So you'll need to find a way to make up for those natural inclinations and shortcomings. Even if you're not highly analytical (I find that real estate attacts many of those types) my advice is still the same.
Take action. I'm not saying go max out your credit cards, throw all caution to the wind and just go buy the cheapest house you can afford. But don't get stuck in learning mode. Every strategy works (flipping, wholesaling, AirBnb, etc.), but they don't all work for everyone. Pick the one strategy that sounds like the best fit and buy the best book on that specific subject. Personal recommendation is @Scott Trench 's set for life book on personal finance and Brandon Turner's The Book on Real Estate Investing. Read that book until you find something you don't understand and then research that topic. Once you've read the book move on to the next step.
Networking. Real estate is a people business. You say in your post that every property in your market doesn't work. But likely there are local investors doing quite well, even today. Spend some time and a little money if you have to to go to meetups, network with other investors, and ask for specific advice on the specific question you have (ex. How do I find an investment friendly realtor to start looking for good 2-4 unit multifamily in my local market to house hack?; and not How do I find a good deal?)
Then just rinse and repeat that strategy. Investing is 90% action up front and 10% learning. Find trusted advisors and move forward one step at a time.
Lastly, I'm an out of state investor, but I didn't start that way. You certainly can, but realize that it is highly risky! You will have a much easier time figuring out how to do your first deal locally rather than learn a brand new business, with people you've never met, with product you can't see, in a market you don't know.
House hacking a small multi (2-4 units) is a great start, requires a small downpayment (5% is available now), and can give you the experience and capital to make your next moves if done correctly. When house hacking, you don't need to make cash-flow, you just need to subsidize your housing cost. Any housing cost househacking that is less than comparable rents is a win. Keep working and save the difference to invest. Then let time do its thing. Real estate is a get rich slow, but get rich for sure game.
Best of luck!
- Member since 2023 · 2 posts · 0 votes2y
Quote from @Devante S.:
Hey Nay, excited for you to start your journey! Hoping I can help you two out a bit here.
Whether you choose to purchase your first multifamily or single family income generating property, a major key you're going to want to know is not to bite off anything you can't chew so you don't find yourself in extraneous debt positions and overly large rehab projects or timelines. When you're just looking to start investing but don't have unlimited capital, I've seen a not-so-common but very successful method of scanning small town, seasonal, or rural markets (off-market preferred) that have older homes needing an easy facelift. (New carpets, Siding, Paint, maybe just a few appliances)
The reason being is that many (many) people seem to forget that rental housing is incredibly hard to come by in small towns or outskirts of cities where the primary industries are medical clinics, restaurants, bars, farms, and factories. A lot of independent contractors or blue collar workers reside in these areas as well (trade skills are prevalent). If you haven't seen it already in your area, midwestern investment groups (The big guys) are just starting to catch on in the last 2 years as more 100-250+ unit buildings are going up in these towns. But newer investors have an opportunity to take care of small town communities and provide housing for those who work often but aren't ready to settle down.
I've helped a good friend purchase an older and larger farmhouse in rural Wisconsin, which he then flipped it into two units by rehab and adding a second entry way. By the time he was ready to lease the applications came in quickly due to the rent being more affordable than inner city units and fulfilling a great need for rental housing in the more rural areas or outskirts of town. After a few years you could likely sell to a new investor or even a long term tenant while moving on to other adventures. These are all just possibilities on ways I've seen people get a foot in the door in this market.
If you're looking for good materials learning how to get started I've put together a leasing guide for new or self-managing landlords/investors. Its 22 pages, step by step on how to actually lease your property, and straight to the point. I also make myself available for people who use the guide to answer questions by phone while you learn how to get your properties rented. Connect with me if you're interested and good luck!!
- Member since 2023 · 2 posts · 0 votes2y
Hi Devante, I'd like a copy of your guide please. I'm about to buy my first rental property. Thanks
- Real Estate Agent · Central New York · Member since 2023 · 207 posts · 96 votes2y
Hey Nay! There are lots of resources available to help with learning. Bigger pockets has its own “boot camps” and investing specific guides to suit your situation best. I would recommend looking at some of the materials on the BP site. I’m located in Syracuse NY, and the area is very affordable in the grand scheme of things. Multiple universities, hospitals, and a healthy downtown scene. Multi family properties are very common in the area. Typical layout is 3 beds on the lower unit and 3 beds on upper unit. A 3 bedroom apartment will typically go for anywhere between 12-1600 depending on condition and area. Tenants are typically responsible for utilities. Would be happy to discuss further if you’re interested! I also have contact with multiple lenders that would be happy to help with the finance side of things
- Lender · Denver · Member since 2023 · 127 posts · 26 votes2y
Finance cowboy has some great content. We have done some webinars with him. The bigger pockets podcast is great as well.
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