Fundamentals on investing

[James John Losinski]

Hey all, I’m new to real estate. Not to active on here and that’s my own fault. I am wondering if someone could teach me or tell me some fundamentals on evaluating properties, what cost to expect when buying a rental property,  and how to determine rents from something other than the online sites. Any help would be truly appreciated and I will work on being more active on BiggerPockets. Thank you. 

[James Hamling]

Ok @James John Losinski your question is WAY-too open ended as it basically says "hey, will anyone please teach me EVERYTHING" lol. 

So, I am going to answer to the things I most commonly see MISSED is such "teachings". 

FIRST ACTION before you look at a single property, before do any search, even before connecting with any agent's, a "core-4" or any of that is to : START with SELF-assessment. 

It's of UBER importance to know what kind of an investor YOU are, what expectations YOU hold, to define your capabilities and short comings in actionability. Because from this, it will direct what strategies and market to look into, which to ignore, and the base parameters to start putting together a PLAN. 

Your 1st action item in this is to figure out are you either: (A) an EQUITY investor, or (B) a DIVIDEND investor. 

To explain, here is some example of such persons: 

Ram is mid 40's, tech engineer now in management for such, very secured in his position in industry given the many years of hard work and proven track record. Ram is fearless on layoff, for Ram layoff is just an opportunity to accept any of the # of constant offers he get's other places. Ram is self made, and with it lives decent but frugally. His $300k annual income well exceeds his cost of living even after tax. Leaving Ram many ten's of thousands just laying around and, most importantly, tax's are a big hit he'd be happy to reduce. 

Ram has 3 kid's, all under 10. For Ram's family university is non-optional, it's an expectation. And Ram cringes over thought of how expensive university keeps getting. 

For Ram, he follow the plan of buying a very good, class A property, 1 a year. Generally an A-class townhome, not luxury but luxury adjacent. And to keep things as operationally simple as possible, it's new construction each time. Because Ram want's ONLY A class tenant's. 

For Ram, the net-0 cash flow in early month's/year's is a non-factor. Because for Ram, the tax advantages are a very sizable $-in-pocket factor of profit that start's yr1. And Ram is focused on the equity growth; from mortgage paydown via tenant paid, from appreciation AND forced appreciation because Ram has a GRREAT advisor who get's him into Phase-I development's in the hottest, growing markets, in short "getting in early" and enjoying the equity ride up. As well rent appreciation. 

Ram has a 7yr recycle focus, because again, NEW units, meaning 0-cap-x. Ram being a math/science wiz he know selling at yr7, using 1031 to redeploy profit's, is a huge profit from staying in that 0-cap-x zone AND via pyramiding gains. 

Ram's plan is to pyramid up as best can during these growth years, keeping any/all profits IN the investing action, to grow maximum dividend potential for when kids start university when Ram will "flip the switch" too a DIVIDEND focus.