Am I looking at properties too soon?

Question

Hello, everyone!

I am starting out in my REI mission and am currently scrolling through the MLS looking for deals and practising how to analyse the numbers of some of the properties that I find. However, I'm worried that when I find a deal, I won't have everything thing in place to actually make a move. Some initial questions that I have are:

• Should I go to a bank and get pre-approved so I know how much I can actually afford? I'm currently looking at places that are less than $100k, so I'm sure I can cover it if needed but is getting pre-approved a good thing to do? Does that make the purchasing process quicker?
• Should I already have a CPA, RE attorney, contractor, property management firm already in contact in case I do find a deal? Or is finding these people afterwards what usually happens?
• What else should I do (apart from due diligence, like educating myself etc.) Should I remember to do before actually making an offer?

Thanks for whatever help comes my way!

Jeff B. · Answer

As a seller, I demand a POF and Approval Letter to even consider any offer.  So for me, there's no progress w/o these - - yes, it makes things expedite.

Yes, you ought to know what you can afford as financing, but w/o a specific property as a candidate, a lender will only give you a ballpark "you can afford to buy at $xxx with terms of yy down, zz years at %% rate.

Your team:  especially when shopping in diverse communities, your day-to-day people will depend greatly upon WHERE you buy.  Your professional support doesn't matter except if you cross State lines.

Deal Analysis:  You *MUST* master this to begin making any offers IMO.  The pain of failing to understand the numbers will send you to an asylum and/or bankruptcy.

Brandon Leong · Answer

@Jeff

Thanks for the quick reply! This helped a lot, I will go out to get a POF and an Approval Letter.

Since I live in New York City, I'm looking to invest out of state, because the RE prices here are insane. If I was to buy out of state, then what should I be looking for in terms of a team? Should I fly there to actually vet a team out?

And I am definitely trying to get my deal analysis skills up to snuff, at this point, I'm still pretty slow at it.