Advice for a Newbie Interested in Rentals

3 Replies

Hello everybody, like my title states, I am a newbie when it comes to real estate. I have invested into a few raw land properties and sold them. It took a bit of patience but thankfully they worked out. It's not my interest of choice, I did it thinking I'd get "quick cash" and for the most part I did but I ran into a couple of issues. Anyway, I would like to get into rental properties but my question to anyone who is kind enough to tell me is, where did you begin? It's simple to say "do research" but how exactly does one start? For example, I bought a property really cheap and later I found out, it had taxes owed. Before I knew it, I ended up paying triple in debt I never even created. So my question is, how can a person do research the "right" way in order to avoid an incident like mine? I'm taking baby steps so please take it easy on me 🙂

Have you found a REIA in your area? Many of them have newbie classes that talk about the basics. For example, the house that you purchased with bad debt should have been found during the closing process if you didn't find it yourself. In those circumstances you should have been able to go back to the seller and renegotiate due to the taxes or backed out of the contract. There are many posts on BP as well as many books out there that could give you a good start. Are you listening to the BP podcast?

@Cynthia Molina What do you want to accomplish in real estate? What’s your purpose? I want to achieve financial freedom for my Mom and I. To do so I need to know the total of our combined income, a dollar amount to save, and the dollar amount saved to invest in more rentals. It’s very important to cover your expenses AND still be able to purchase more real estate.
My goals are to max out the 10 loan limit for conventional financing. Flip 3 rentals @ $30k profit after all expenses. The flips' profit will go towards a fund to get into small multifamily. Commercial real estate, 5 units and up, is where the cashflow really gets interesting for me. To get started I read a lot of books relating to rentals, there is a list on here of the top real estate books to read. I read and listened to every podcast relating to buy and holds. I went to a few meetups, became very active on the forums, found the key members needed to achieve my goals. Those key members were, contractors, lenders, real estate agents, an accountant, insurance agent, and someone to model my plan after. 90% of that list was found in this community. As far as your issue with the deed, that should have been taken care of by the title company. In my experience, we don't close without a clear title. I'd say: make sure you have reserves (6mnths worth) to handle a property, clear up your credit report, attend one meetup and really connect with someone making moves. You need to have an established criteria: what types of houses are you looking for, where, do flood zones matter, estimates for insurance, how far are you willing to travel, will you manage the property or will you work with a property manager... Follow up with me if you like. Kind of set the foundation and then set goals you want to accomplish. Per Brandon, I always look for at least $200 cashflow after expenses. There is tons of information on here, and that can be overwhelming. Maybe I can help you narrow things down and get focused. The best way to achieve your goal or goals is to get very specific. Laser focus to the finish line. One of my goals is also to help people get started in real estate. This site has been a true blessing for me.

@andybauman it was a building that I purchased at an auction. It was a very amateur mistake of mine i guess. And yes i have looked into REIA in my area, I have plans of attending soon. Are you a part of it? Do you think I could find someone willing to mentor me? Obviously I know that it won't be free but I attended a seminar where they provided mentorship for 6 months at 30k. I think it's pretty outrageous.