I am a newbie looking to invest in rental properties and perhaps even flip a home! Looking for ANY advise I can get on how to get over my analysis paralysis and to find a property to get started with.
Also, does anyone have any tips on what ROI should look like when deciding if a property is a good fit financially?
@Lauren Apicella welcome to BP. If you check out the resource tab you can find some good calculators to use for ROI. I am new as well and have not purchased my first investment, but I would say you should look for an ROI that makes you happy. It just depends on what your comfortable with. Do you want 5% ROI or 10%ROI. I think it's really up to you and your financial standing. Good luck.
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Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers.
Two Great reads, I bought both J. Scott The Book on Flipping Houses,The Book on Estimating ReHab Costshttp://www.biggerpockets.com/flippingbook
Consider checking out HUD homes for small multi's owner occupied gets first crack.
You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it.
Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over
Welcome to BP. I am your neighbor - I live in Lisle and our office is in Downers Grove.
Regarding your question: it's up to you. There's no magical ROI number that everyone has to abide by. I am very conservative and I have ways of growing my money very quickly. So to me, I want to make 30% CCR (cash on cash return) on my rental properties. I want to make 40-50% or more on my rehabs. But that's just me. I know other investors who are happy with 10%-15% CCR on their rentals and some are OK making 20-30% on their flips. These are annualized numbers.
To overcome your analysis paralysis, you need to just make offers and be willing to pull the trigger. I literally make offers everyday - about 100 every single day. But I have a team in place and I have 10+ years experience.
It's really NO BIG deal to make an offer. Just make an offer and put an inspection contingency as your out in case you realized you don't like the property. You will never make money as an investor without buying a property and you will never buy a property until you make an offer. So just do it - make an offer...everyday.
Read my weekly "ramblings" - actually, they are my weekly business update so BP Nation can read what's going on in the life of a full time real estate investor. These posts might inspire you to make an offer and overcome your analysis paralysis.
@Brent Mattison - Thanks so much for that info - I checked out the resource tab and found some great tools that will be very helpful!
@Paul Timmins - After reading your post I went ahead and purchased the PDF version of J. Scott's book - so excited to dive in and learn!
@Wendell De Guzman - Hey neighbor! 100 offers a day?? That is unbelievable! Are you looking in the western suburbs for these deals? Honestly, I didn't think it was possible in this area to have that much opportunity. How do you find all these opportunities? How do you know when you are looking at a property that can have flip potential?
@Lauren Apicella welcome to BiggerPockets. I have read a few of your post, and I realize it can be overwhelming just getting started, however keep your head in the game. Reputation is key when getting started because it is a new process and the more you read and learn the easier it becomes. The deals can sometimes be the hardest to find, but if you know your strategy and have a plan - not just goals will be important.
Often beginner investors (including myself) had lofty goals, but never defined the steps - I didn't have a clear path to achieving my goals. Take an hour; write down 10 goals no matter how lofty they are, and then start defining the steps to get there.
Trust me - its hard to do but well worth the hour or more you spend doing the initial through process, but then things become clearer and you may have to revise along the way.
I wish you great success!
Thanks for the encouragement @David P
My goal is to have 5 rentals in the next 3 years. Do you think that there is a price range limit for a new investor? The area I live in has high price points. I can afford the downpayment and mortgage, but I don't want to over extend myself on the first property (looking at rental properties, a 6 unit apartment complex). In your opinion, should I stick to SFH or MFH that are at a lower price point so I can continue investing? Instead of diving in to the first one do you think it would be advantageous to take my money and invest it with a more experienced renter/flipper and see if they would be willing to show me the ropes in exchange for the capital?
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