First time rental property buyer! Looking for friendly advice.

First time rental property buyer! Looking for friendly advice.

Member since 2019 · 4 posts · 0 votes

Hello! 

My name is Troy Kostick. I am a 26 year old Union Plumbers 4th year plumbers apprentice. The money is good, and is only going to get even better in the next 2 years. But it is blood money, the older I get the less I will be able to do what I do. Before I get too, I would like to start investing into rental properties and create some supplements to my weekly take home so that one day I can get a job thats less physically stressful but still make the money that being a plumber would make me.

 My fiance and I are getting married 2/22/20. Shortly after that my goal is to purchase a duplex in order to begin a slow start in rental investments. Right now we are renting an apartment in Plainsboro, NJ. It is very expensive, and with bills, wedding payments were slowly starting to fall behind. After the wedding, and after my next 2 years of raises, we should be much better off. She is a graphics designer and makes pretty good money, while also grinding most nights and creating an Etsy portfolio for passive income in the long run.

She is very hesitant in buying a Duplex. She knows nothing about real estate, and its not that she doesnt BELIEVE in me to make this happen, shes just nervous. 

I order to ease the nerves I am trying to educate myself as much as I can in the next year. Obviously, this all got kickstarted from reading Rich Dad, Poor Dad. My partner at work who is also interested in Real Estate investments suggested it to me. I didn't really have any sort of goals in my life and it was very inspiring. I am now about a quarter of the way through the Bigger Pockets Book on Rental Properties. It suggested somehow inserting yourself into a community of like minded people, and I do not have anyone like that in my life when it comes to these sort of things. So here I am. 

Essentially what I am looking for is maybe some concrete first steps into buying my first Duplex. Any and all information would be absolutely incredible. 

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Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
7y

@Troy Kostick, good on you for getting clear and making smart choices early in your life.

Nothing will convince our wife like a growing check book. Find some mulit-families and show her the numbers. Show her how inexpensively you could live and, here's the important part, tie that you your goals as a couple. Kids, vacations, grad school, whatever.

In the meantime, learn as much as you can and start analyzing a lot of properties. Try to do 5 a day. You have to become intimately familiar with the economic realities of REI. What works, what doesn't and why.

You will need some cash to get going. What can you cut now to be able to save? Take a hard look at your finances and trim the fat. I promise it's there to cut.

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  • Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
    7y

    @Troy Kostick, good on you for getting clear and making smart choices early in your life.

    Nothing will convince our wife like a growing check book. Find some mulit-families and show her the numbers. Show her how inexpensively you could live and, here's the important part, tie that you your goals as a couple. Kids, vacations, grad school, whatever.

    In the meantime, learn as much as you can and start analyzing a lot of properties. Try to do 5 a day. You have to become intimately familiar with the economic realities of REI. What works, what doesn't and why.

    You will need some cash to get going. What can you cut now to be able to save? Take a hard look at your finances and trim the fat. I promise it's there to cut.

  • Member since 2019 · 4 posts · 0 votes
    7y

    @Jaysen Medhurst Thank you for response! This is fantastic. 

    In regards to analyzing properties, what do you mean exactly? Or should I ask how? If this is too long of an answer maybe you could point me to some literature that explains this process in particular? I understand books and podcasts are great for education and I'm using these resources but sometimes when you spend 2 hours with a book I tend to get lost a little and maybe forget intricate details. I am a man of writing things down and creating tangible checklists. 

    And I agree there's always room to cut. We don't have cable television, barely use heat/AC/electric. We're not exactly big spenders which is good. She has student loans but I do not, and my credit is almost perfect. We are just a small hair above breaking even and for example if one of our cars goes, or something big like that comes its going to hurt and our safety net is gone. 

  • Rental Property Investor · Schenectady, NY · Member since 2018 · 8 posts · 2 votes
    7y

    @Troy Kostick

    Young and a plan for the future, Excellent! Good luck...

  • Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
    7y

    @Troy Kostick, you're in the right place to learn. No better resource than BP. 

    Analyzing properties is the process of running the numbers and determining if they may be a good investment. There's a ton on BP about this. I suggest signing up for one of the free weekly webinars. There's a different topic each week and "analyzing deals" shows up pretty often. There's also the webinar archive, but I think you need a Pro membership to access that. There are also some great BP books worth picking up.

    Sounds like you need to get your personal finances in order as well. Do you have a written-down budget? Have you tried tracking all of your expenses for an entire month to determine where your money's actually going? 

  • Member since 2019 · 4 posts · 0 votes
    7y

    @Jaysen Medhurst My fiance and I have indeed sat down together and gone over monthly expenses but but now that I'm thinking about it, it was very loosely accomplished. Because honestly the numbers aren't exactly measuring up. So you're right, I think it's time we did a more thorough investigation, thank you for your advice Jaysen.

  • Rental Property Investor · Hawthorne, CA · Member since 2018 · 655 posts · 900 votes
    7y

    @Troy Kostick

    Hey Troy it's great that you are planning for your future. 

    The process for buying your first property is pretty straight forward.  

    1. You get your last 2 years W-2 forms together for you and your fiancee.

    2. You get your bank statements together or documentation of how much liquid cash you have.

    3. Make sure your credit score is good.

    4. You take this information to a loan officer at a bank or a mortgage broker who will use this information to pre qualify you for a loan amount.

    5. Once you know how much mortgage you qualify for, you and your fiancee start looking for a places to buy.

    6. When you find a place that you can afford based on your pre qualified loan you then make offers on the property.

    Now for the not so forward part.  You should make sure make sure your fiancee is 100% on board with your decision because it involves the both of you.  In order to succeed not only in marriage but in real estate investing you both have to be on the same page.

    Next the path to finding the property that best fits your goal to financial prosperity will be difficult.  It will include running numbers on places to see if they are financially beneficial to you or not.  This will take some education and I would do some homework to find out what a good deal is or not.   

    I hope this helps.  Good Luck!

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