My first rental property!!!!!

5 Replies

So I’m thinking about buying my first property, Cash about 40-45 thousand bucks. Fixing it up and getting sum rental cash flow coming in can anyone help with suggestions I’m super nervous.

@Sammie Sams follow fair housing laws and be fair but firm. Also, finding a good tenant is very important!!! Don’t rush it! Understand your market and what good kind of tenant you are able to attract!(like don’t expect them to have 5x the income and a credit score above 720, be realistic)

Do your research and don't neglect any problems. Be responsible and keep studying about being a landlord

Good luck

@Sammie Sams

You are basically describing what they call "house hacking." It's a good strategy if you are comfortable living in a multifamily instead of an SFR.

I have no idea what your personal life is like. And different folks have different opinions. But from a pure return perspective, you are almost always better off leveraging than not leveraging. So if you can do it, looking for a FHA/Fannie/Freddie Loan to buy a smaller multi-family might not be a bad idea.

No idea where you live but consider looking around the Scranton suburbs as well. Most people commute in the area by car. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

That’s awesome that you have the cash.  I’m not very familiar with the Scranton Market.  I focus in Philadelphia.  If someone chimes in and says that this isn’t feasible up there then by all means disregard.  

If you are considering house hacking, I would suggest using an FHA 203k loan. There is a conventional version of the loan but the name is slipping my mind at the moment. Essentially, these are rehab loans. The cost of the rehab gets rolled into the purchase price and that total becomes your mortgage. If you do your research properly, and BUY RIGHT, you can move into that property with some built in equity. With this strategy you only have a few thousand of your money into the deal.

With the rest of your capital you can purchase another property in cash, or you can use it as a down payment and purchase a larger or higher quality property.  

Be aware that if you choose to use an FHA 203k loan, that you MUST use a HUD approved contractor to do the work. You can't do any of it yourself.

I hope this is helpful.  Good luck!