Must do's

Question

What are some must do things for a person like myself seeking to enter the real estate field in flipping and renting out homes should look for, do and beware of that most people starting out may overlook?

Elizabeth Colegrove · Answer

• LOCATION LOCATION LOCATION! - Pretty is nice but if the schools, the area, and the place isn't desirable people won't want the house
• UGLIES on the Nicest block- we want the cheapest house in the nicest area. I find when you are one of the most expensive houses, it is MUCH harder to rent
• Ceilings- There are ceiling to an area. How much you spend does NOT transfer to value. So make sure you are not spending on stuff that you will never see a return.

Paul Timmins · Answer

@Andre Wilson

Welcome. Time to build the foundation below.

Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 90 past ones to catch up on.

Two Great reads, I bought both J. Scott The Book on Flipping Houses,The Book on Estimating ReHab Costshttp://www.biggerpockets.com/flippingbook

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 all the cash buyers (rehabbers) you will need.

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

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good luck

Paul

Guy M. · Answer

Run a credit check on the tenant through a tenant screening service or online tenant screening service such as mysmartmove.com, ask for pay stubs and W-2s to verify income and/or contact their employer, and ask for past landlord references. Look for judgments for non-paid rent in their history (especially) and discuss any other concerns you might have. If you deny them occupancy, you have to let them know what item(s) on their credit contributed to their denial and inform them that they are entitled to get a credit report within 60 days of the denial (this should be a denial letter that contains the reason for the denial and includes a reference to the law that states a tenant is entitled to a free credit report within 60 days of denial).

Potential tenants don't have to agree to provide any of the above information to you, and when they don't... you should consider that to be a red flag. With every tenant this process should be the same. It is illegal to discriminate based on race, religion, sex, etc... a landlord running a credit check on one potential tenant and not the other is an example of discrimination.

Other than that, once you've verified your tenant you will feel comfortable handing over the keys to the property. Otherwise, failing to do any of the above could lead to unlawful detainers, property damage and financial ruin. Check out some of the horror stories on this board.

Andre Wilson · Answer

How do I go about doing so?

Kirk R. · Answer

Be frugal as &()#@$!

Andrew Cordle · Answer

@Andre Wilson

Hello "BP Newbie" and welcome to Bigger Pockets.   In the meantime here are 7 tips to help you grow your business using BP:  1. New to BP? http://www.biggerpockets.com/starthere  2. Develop your own business strategy. -- Don’t just be a “jack-of-all-trades"   3. Grow your business by developing your business plan. - Remember there is a difference between goals and a plan. http://www.biggerpockets.com/files  4. Locate and attend several different local REIAs as they’re great opportunities to network and meet wholesalers, lenders, and contractors.  5. Stay away from the “guru” sales-pitch events - they rarely increase your investment knowledge, they merely empty your wallet!  6. Spend 30 minutes a day on Bigger Pockets by connecting with “colleagues,” perusing blogs and videos, and engaging with others on the forums: http://www.biggerpockets.com/meet  7. Set yourself up to receive free alerts to be notified of subjects that interest you: http://www.biggerpockets.com/alerts

Andrew

Mary B. · Answer

Prepare for failures as there is no other route to success.  Yet you can't let failure break you and that goes for real estate investment or any other industry that you select to conquer / be a part of.

Prepare for people out to knock you down, keep you down and perpetrate fraud both blatantly as well as overtly. They'll be in the form of friends, relatives and strangers.

Prepare for the worse, hope and pray for the best. My coin.

Kudos,

Mary

Andre Wilson · Answer

How would I go about doing so?

Guy M. · Answer

When renting properties, be sure to find reliable tenants. If you don't thoroughly analyze a potential tenant before they begin renting from you, expect a hard road ahead. Check their rental history, credit, etc. to protect yourself and your property.

That's the best advice I can give you from experience.

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