Hi Everyone! Newb about to start looking for my first deal.

6 Replies

Hello Everyone! I'm clearly not *that* Brian Burke (something I've had to say on 3 completely separate occasions in my life now)

I'm a complete newbie currently renting in Naperville and working downtown. I've just been handed a gun (pre-approval) today and I'm looking to buy my first multi-family to house hack in the Chicago suburbs or possibly Chicago proper.

Education wise, I've tried to cover the basics so far. At this point, I've read and took notes on: the book on rental property investing, " estimating rehab costs, " managing rental properties, rich dad, poor dad, and I'm about halfway through Buy, Rehab, Rent, Refinance, Repeat

I'm also around 200 episodes in to the BP podcast after I wandered over to the youtube channel from Graham Stephan's - I basically listened from graham's interview forward to the most current podcast, and then backwards from the same episode over the last 2 months.

I've been practice-analyzing 3 or so deals a day for the last 20 days, and will start looking at properties this weekend. I feel like I'm missing something crucial because I read everywhere that I should be (or that people commonly are) scared to pull the trigger on their first deal, but I'm mostly excited. I can't wait to make a whole bunch of mistakes :)

Are there any critical books or other information for a new investor that I may be missing? I was planning on looking for the typical cosmetic rehab (or *slightly* more work) target property, possibly from a wholesaler, but I'd like to know if that's a good idea for the first property, or if I should go turn-key. I'll also be looking in the local forums and trying to find the nearest meetup around me.

Thanks for everything in advance; looking forward to joining all of you in this journey!

Keep it up and one day I’ll be the one saying “no, I’m not ‘that’ Brian...”

Plenty of room for two of us here, good luck with your journey and welcome to BP and the wonderful world of real estate!

If you go to the Mid Atlantic Summit in Chicago this summer be sure to say hi.

Hi @Brian Burke #2 - I think your analysis practice will pay off as to not being stuck in that analysis paralysis phase - good work. I concur that multifamily is definitely the way to go. 

If you are handy and thinking about a renovation loan, keep in mind that your general contractor will be the one doing the work. Undergoing a significant rehab can yield aggressive returns, but always increases the risk of unknowns and cost/scope explosions. You have to determine your risk tolerance. 

If you want to be very conservative, buy something renovated recently with the plumbing and electric already updated. Many times these already have tenants, so you are cash flowing from day one. 

I typically like to go somewhere in the middle with a scope where I can buy with a conventional loan that doesn't require a renovation loan. Preferably something that I can add value and is under market rent. Do some surface renovations and bring up to the new market rents. 

Given you are going to be living in this place, the MLS will likely give you a much better chance of getting into a preferred location. It doesn't hurt to network, but it's a numbers game where the MLS wins hands down. I anticipate the next few months will be a good opportunity for new housing inventory. The number of newly listed properties in March-April will typically increase roughly 50%, and another 50% in May-June. If you're having trouble finding "the one", these next few months should see a lot of new inventory.

I agree with what has been said and want to add some input. 
You've done the research to give you language to understand transaction basics and the analyzing to understand basic ROI potential. You need to start seeing properties. Even if you want an off market/whole sale deal. None of the principles will make sense without getting a sense of property function and FULL potentials. Initial numbers are always deceiving especially when rental values are mostly under market value. You need to look for full potential and ARV. If you aren't looking at the property the initial pro-forma is just a taste of what the property could be. For me, that would be like judging a book base on the cover. Many multi units are over priced in the areas of Chicago (N/NW) I focus in. Once you start seeing properties you'll notice that. (I can't speak to the Chicago Burbs- there are too many micro economies out there).

I realize this might make me sound like a Used Car Sales Men but it's the truth! Seeing properties is part of the education even if you're years away from buying. Even by just going to open houses! It's all helpful. I've heard buyers say, they don't want to "waste my time" but it's never a time waster. Every property a realtor sees helps them with CMAs, pricing and ultimately inventory understanding. 

You're doing a great job! Keep it going. 

Originally posted by @Brian Burke :

Hello Everyone! I'm clearly not *that* Brian Burke (something I've had to say on 3 completely separate occasions in my life now)

I'm a complete newbie currently renting in Naperville and working downtown. I've just been handed a gun (pre-approval) today and I'm looking to buy my first multi-family to house hack in the Chicago suburbs or possibly Chicago proper.

Education wise, I've tried to cover the basics so far. At this point, I've read and took notes on: the book on rental property investing, " estimating rehab costs, " managing rental properties, rich dad, poor dad, and I'm about halfway through Buy, Rehab, Rent, Refinance, Repeat

I'm also around 200 episodes in to the BP podcast after I wandered over to the youtube channel from Graham Stephan's - I basically listened from graham's interview forward to the most current podcast, and then backwards from the same episode over the last 2 months.

I've been practice-analyzing 3 or so deals a day for the last 20 days, and will start looking at properties this weekend. I feel like I'm missing something crucial because I read everywhere that I should be (or that people commonly are) scared to pull the trigger on their first deal, but I'm mostly excited. I can't wait to make a whole bunch of mistakes :)

Are there any critical books or other information for a new investor that I may be missing? I was planning on looking for the typical cosmetic rehab (or *slightly* more work) target property, possibly from a wholesaler, but I'd like to know if that's a good idea for the first property, or if I should go turn-key. I'll also be looking in the local forums and trying to find the nearest meetup around me.

Thanks for everything in advance; looking forward to joining all of you in this journey!

 Welcome aboard Brian.

Quick update: FIrst property under contract! I kinda lucked out, though :D

I haven't been anywhere near as active on the forums as I'd intended to be (though I've been lurking with searches on lots of questions I've had). I've sust scouring the MLS sites for all multi-families near a metra line.

I made an offer on a triple in the Hermosa area of chicago (in the path of progress, but still relatively cheap), but there was a lot of competition on the property and even though I offered 6% above their asking price, they went with another offer (I'd imagine with more cash up front, I'm using a 203k @ 3.5% down)

I was looking at the MLS late friday night and a quad popped up in Matteson (south suburb) literally as I was browsing. I know the area because it happens to be where I grew up. I ran the numbers through the rental calculator 3 times, cause I was pretty sure I was making a mistake somewhere, but it still looked good after the third time. I texted my agent, and she had us in to look at it Saturday afternoon. Made an offer, and had it under contract that night!

Thank you all again, the wealth of knowledge and assistance here has been beyond helpful, and I hope to be able to give back someday!

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