Seeking for Advice on my First Investment Property
New to Real Estate · Member since 2021 · 2 posts · 2 votes
Seeking for Advice on my First Investment Property
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4yExercise patience. Just because you're made the decision to invest doesn't meant that today is the day, or even next week or next month. First, this is a very hot market with everything selling for top dollar. Good deals are harder to find. Second, interest rates are low so there are more buyers getting into the game. Third, we're seeing a major migration of people with money leaving certain areas of the country and moving to more rural areas, which is depleting the inventory.
Keep thinking about what you really want. Keep studying the market. If you know what you want and what you can pay, you'll find something eventually and be ready to pounce because your homework is done.
One thing you should consider: driving for dollars. Spend your Saturday mornings (or whenever) just driving around with your wife. Really look at the communities you're interested in and see if you can find any duplexes, triplexes, or fourplexes that are NOT on the market but that may work for you. Go home and research them. Find out when it last sold, if the owner is out-of-state, etc. Try to find a property that's been owned for 10+ years because that means the owner has plenty of equity and may be ready to exit the rental game. If the property was owned for 30 years, then you have an even better chance. Anyway, you identify properties that meet your requirements, then track the owner down and simply ask them if they would consider selling. I've purchased 12 properties in a community of 9,500 and every one of them was not on the market for sale and I didn't do any mass-market campaigns or sit on the phone all day. I knew what I wanted, I told everyone so they could help me look, and then I asked.
It's called "driving for dollars" and you can find a lot of discussions on BP. @Ryan Dossey is an "old" pro at this and has some great information on his YouTube channel:
The DIY Landlord Book4.7248 Reviews
6 Replies
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes4y
Exercise patience. Just because you're made the decision to invest doesn't meant that today is the day, or even next week or next month. First, this is a very hot market with everything selling for top dollar. Good deals are harder to find. Second, interest rates are low so there are more buyers getting into the game. Third, we're seeing a major migration of people with money leaving certain areas of the country and moving to more rural areas, which is depleting the inventory.
Keep thinking about what you really want. Keep studying the market. If you know what you want and what you can pay, you'll find something eventually and be ready to pounce because your homework is done.
One thing you should consider: driving for dollars. Spend your Saturday mornings (or whenever) just driving around with your wife. Really look at the communities you're interested in and see if you can find any duplexes, triplexes, or fourplexes that are NOT on the market but that may work for you. Go home and research them. Find out when it last sold, if the owner is out-of-state, etc. Try to find a property that's been owned for 10+ years because that means the owner has plenty of equity and may be ready to exit the rental game. If the property was owned for 30 years, then you have an even better chance. Anyway, you identify properties that meet your requirements, then track the owner down and simply ask them if they would consider selling. I've purchased 12 properties in a community of 9,500 and every one of them was not on the market for sale and I didn't do any mass-market campaigns or sit on the phone all day. I knew what I wanted, I told everyone so they could help me look, and then I asked.
It's called "driving for dollars" and you can find a lot of discussions on BP. @Ryan Dossey is an "old" pro at this and has some great information on his YouTube channel:
The DIY Landlord Book4.7248 Reviews - Investor · Lehigh Valley, PA · Member since 2019 · 129 posts · 127 votes4y
@Neil Damayo - @Nathan G. Has dropped some sage advice in the post above on driving for dollars and researching your areas. What techniques have you all been currently using to look?
Building will certainly cost you way more than finding a property that you can renovate and end up with the same result.
Patience is definitely key, it took about 6 months for the right deal to come up when we were searching for our househack. And I will also give a +1 on being ready to pounce. Expedience is very important in this market. We were first to make an offer on the househack duplex property and that helped us greatly.
Good luck with getting into the game! You're making a great choice!
- New to Real Estate · Member since 2021 · 2 posts · 2 votes4y
Hello, @Nathan Gesner and @Ryan Chatman!
I really appreciate you both for your advice! Being new to all this, we’ve done some online research, but definitely have not tried driving for dollars, that’s something we will do for sure.
Also, yes, we are being patient and are really wanting to put in the time to research and look for the best deals. To be very honest, our timeline for our first purchase is some time around the second half of next year. We’re currently saving up for a downpayment and for other costs, and being ready whenever a good deal comes our way.
Thanks again for your valuable input!
- Investor · Lehigh Valley, PA · Member since 2019 · 129 posts · 127 votes4y
@Neil Damayo I'd also say find an agent to work with if you haven't already. 1, they'll be able to locate places that you can't find online, and 2 you can start going to see those places. It will give you some forward movement and more familiarity with your market. For example, I learned that certain cities in my search areas had crazy high taxes and that definitely modified my end results.
- Realtor · St Paul, MN · Member since 2020 · 17 posts · 21 votes4y
Hi Neil, congrats to you and your wife on the exciting adventure ahead! It's great that you're both ready to dive in and that you essentially know what area you would like to live in. Especially when you're first starting out as a new investor, even if you don't end up living in the investment property, it helps to do it nearby so that you're starting in an area you're much more familiar. It makes it a lot easier to learn the market, physically view the properties and neighborhoods your considering purchasing in, and grow your REI network.
Maybe start by considering what are the reasons that led you and your wife to choose house hacking a duplex? Do you know anyone else in your area that has done that before? If so, reach out to them. Otherwise, what do the majority of investors seem to do in your area? Are single family rental properties more common? What does the buy and hold market look like in your area in general?
As a few others have pointed out, it can be much more expensive to build and it's a lot harder to make the numbers work. Driving for dollars can be a great way to find an investment opportunity as well as a great way to find answers to some of these questions. If you decide a duplex house hack could be successful in your area but you can't find one, could you try converting an existing single family home? Add a mother-in-law suite to rent out as a single family home house hack? What sorts of local ordinances are in place in your state/city that might make it easier or harder to convert a property?
It's great that you both seem to be flexible on your options! Take your time to do some studying, learning, and planning. I'm sure you'll find the perfect strategy for your situation and goals!
- Member since 2021 · 5 posts · 5 votes4y
Hi Neil,
You mentioned that you really like the area that you currently live in but have you considered moving? If so, the Raleigh/Durham, NC market is one of the hottest markets in the country right now with a lot of good opportunities to invest right now. If you are unwilling to move that far, building is definitely a good option if you are able to keep the cost low. I just worked with a client who built a duplex and kept the cost low buy doing as much as he could himself, and only building at a rental grade level (which is not low grade). This will help you keep your costs down while also getting a nice, newer place to live while you look for your next investment.
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