looking for new rental property

8 Replies

Hello, my name is Val.

I am  a homeowner of 5 yrs. I am looking into buying a rental property now.
Just starting out. any tips or suggestions? loans, things I should look for, programs that can help?

Thanks!

@Valeria R. If you've owned for 5 years, you may have enough equity in your home and be able to pull that out via a HELOC or cash out refinance.

Tips!

-Buy preferably in a B and above location. Or a C+ location with potential to be a B location.

-screen tenants - if landlording. If using a pm give them a strict guide to abide by when screening tenants.

-Make sure the math works in regards to cash flow (perfect this by practicing daily) BP has numerous calculators in the TOOLS section

- Get great systems in place - contracters, cpa, lawyers, real estate agent, accountants , rental documents prior to closing a deal etc

- When taking a loan consider using leverage i.e. fha loan (3.5%), if youre a veteran (0%) percent down - make sure to include the associated PMI (mortgage insurance) in your calculations for cashflow that i spoke of in tip #3.

Im a newbie myself and i am currently in my first contract for a MFH. These are all things I made sure I did. Hope this helps.

#cheers

@Valeria R. ,

Saying you want to buy a rental, is like saying you want to buy a car...   tons and tons of options! there are +/- to everything.   You need to determine your business model, what types of houses and what types of tenants you want work with!   Some people like A/B properties, some like C/D, it all depends on what you want--appreciation, or cash flow?   The sooner you can fine tune what you want, the easier it will be for you to find the perfect rental!

One thing you'll need regardless of the class of property, is maintenance-- start building relationships with plumbers, HVAC, electricians, etc!  

thanks @Grant Rothenburger yes, today made 5 yrs and Im excited that i can now get rid of that MIP fee..

@Chizoh Uzegbu Can I still get a FHA loan if I have my home? Thanks for tips :) and good luck to you!

You can utilize the FHA loan if you plan on moving into the residence you are purchasing with the FHA loan

@Valeria R.    Kudo's to you deciding to be RE Investors.  I like your mind when you said I been a homeowner and let me try to buy rentals. That's good!! I came from the same route and initially faced issues with handling tenants and evicted few of them and learned my lessons hard. I don't like people going through it.  

Being homeowner and landlord are totally 2 different mind set. One is emotional and other one is opposite, business. No room for emotions. Strict business, if you can do that you can survive and thrive. Otherwise you will regret and want to quit quickly.

I started a friend on REI in 2011 or so. He bought 2 houses for great price and he owned it for 2 years or so but he couldn't able to manage it and ended up selling but did make money on both sides. I am not trying to scare you but just trying to explain little bit before you start getting deep. If you can handle the tenants and you are people person, you will survive!!!

BTW, start working on getting your financial house in order like down payments, credit score etc., That's the key!

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