I am brand new and I am having trouble setting up my priorities. I am spending alot of time saving up capitol for my first buy and reading books on real estate and business practices. In my free time, I am scanning multiple real estate apps looking at properties. Should I stop looking until I get financing and if I should keep looking would it be more beneficial to speak with a realtor first or wait for the money before I involve an agent?
@Phillip Henderson Why can't you do all of it at the same time? Yes you need capital. Yes you need to read up and talk with experienced investors and yes you will need financing. Talk to lenders in OK and TX while you are doing this. Depending on the type of lender (bank, hard money) you can qualify for, you should find out what their underwriting guidelines are and see what you need to get pre qualified. If you are not finding properties on your own or using wholesalers, I would begin networking with realtors to find one that wants to work with you. Make sure they work with investors. Not all realtors like investors nor are they knowlegeable about investing. Let me know if I can help.
Thank you for the response. I am still learning how the buying process goes. I am looking to buy my first property by the end of 2020. I just was not sure if realtors required a pre-approval letter before they would work with a buyer. I am still shopping around with lenders trying to find the best one.
Hey @Phillip Henderson ,
I would recommend to start networking with people that are active in the area you are looking at. Start meeting investors, realtors, lenders, etc that are in the market you want to be in.
You can always set up a initial consultation with a Realtor before you get pre-approved. They can help direct you towards investor friendly lenders. One thing I do when working with new investors is helping them select a target market and setting them up on MLS searches. While you build up capitol and read books, you can also start looking at deals and analyzing them. You can also go to open houses, look at rental listings, etc in the market you want to invest in. That way when you are ready to make your move, you can recognize a good deal AND you know what the normal houses in your market look like.
I see that you are in Oklahoma right now. If you are in the OKC market, I would love to send you a list of some of the network events that I recommend. There are a lot of different opportunities to network with investors in this area.
@Phillip Henderson I'd connect with providers as you're learning. It will help you develop an understanding for norms of different markets and develop better target criteria! I'd just advise connecting with a lender as well and making a plan for exactly what it looks like for you to get qualified, that way you can be sure you're on the right track all year.
I apologize for the late response. This time of year is extremely busy at my job. Haven't had much free time to get online. I have spoken with several lenders since I last posted and have since been pre-approved for a loan. I am currently looking at properties but I am still working on my criteria. I guess you could say I've hit the analysis paralysis that everyone is talks about. I am also still saving up capital. I am not sure my reserve is enough to cover anything that could go wrong yet.
@Phillip Henderson no problem! I'm glad you're taking steps and you're prequalified! Curious what lender you went with? I think it'll be helpful for you to have price point and return expectations associated with different parts of the city. That way as you browse deals you can start getting more and more comfortable with what a "good deal" looks like! I've got a doc I'm having issues uploading!
I'll outline here:
Midwest City/Del City.. 60-80k, 8% cap rates. You should hit the 1% rent to value rule.
South OKC: ^^ same game. If you're very close to the river you might get even better deals.
NE OKC near the med district: same game, but you can get even better deals.
NW OKC: 80-150k, 6.5% caps
Is that helpful at all?