How long did it take you to buy your first rental?

18 Replies

I think one of the biggest mistakes I see investors make is wanting to buy a property as soon as they figure out they want to invest in rental properties. I have investors say I can't fid any good deals on the MLS, what am I doing wrong? Well your not going to find a ton of awesome deals on the MLS at any given time. I have bought all ten of my rentals off the MLS, but it took time to find those deals. I will go months without seeing a deal that would work for me. Remember you don't have to buy a rental right now, especially if your tight on cash and can only buy one for a while.

When I bought my first rental in 2010 I think I have decided for sure I was goi g to buy a rental at least two years before that. It took me time to save money, then I bought a new personal house and had to save money again.  Then it took time to find that great buy that would also be a great rental. 

I am curious how long it took other investors out there to buy their first rental after they had decided for sure they wanted to invest in rentals. 

I actually took a year to wait for my for Primary residence to get approved(short sale) and I had planned on buying a rental when the right one came up. Literally 2 weeks after move in a great deal came up in and I bought it. MLS is all I do. Sometimes it takes months before I'll even find a deal I'm interested. I believe its been 5 months since my last purchase, and I'm coming up on a closing soon. I literally hadn't seen a single one I was interested in since that last one. I have 7 great properties and one bad one that I can't wait to sell. I learned so much from it, and in a way I'm glad I bought it.

It took me around 3-4 months to find the "one".. Looked at tons of places before I felt comfortable with the numbers, property, location, etc...I agree that the deals are scarce and it is better to hold on to the money for an extra month or 2 than throw it at something that will make you lose thousands of dollars over time or more. 

I found one within 6 months and then my second one about 4 months after that. I am very happy with both so far. 

My very first deal took about 4 years. At the time I was starting a new business and my self-employed tax return was an issue when I first tried to qualify for a loan. 

Fortunately, I persevered and kept working hard on my business while scouting for the right deal. Eventually, the perfect deal came along and I seized the opportunity and closed in less than 30 days.  

It was an owner financed deal and we literally wrote our contract out on paper napkin over some beers-he was an odd dude who demanded we meet at his house and that I bring him a 12 pack before we talked business. 

I'm glad I was patient since this first property allowed me to learn the ropes as a new landlord in terms of both rehabbing and tenant management. 

It also taught me about the power of owner financing and how you don't always need a bank to realize your goals. 

My first rental was bought before I knew I wanted to be in the RE business. I was sitting in my accounting office minding my own business when the phone call came. My Mom called. She said that the S & L she worked at had just reposessed the house that my grandparents had lived in for ever.  The people who bought from them had gutted half of it and left a ton of junk in the house.  I bought it for $2900.00.  That's how I got into this game.  That was eleven years ago. We now own 55 units. 

I also have a nephew in another state and he liked the idea of getting into REI. He started taking courses. Two or three that cost him a total of about $12000 dollars to take. They gave him a lot of ideas about wholesaling, subject to's, wraps, and balogna. Several years later, and he has yet to buy a property.

Not to totally diss the courses people sell, but I have never been to any classes or courses. I did read two good books -- "Buy it, Fix it, Sell it" by Myers and "Rich dad, Poor dad".

I try to tell people not to think too much. Go out and find a cheap house in a decent neighborhood and buy it. 

Thanks for all the comments.  @Arlan Potter  

paying for real estate teaching does not always equal being successful in real estate investing especially if you are spending enough money to buy a house!

@Cory Binsfield  I am currently in a situation similar to yours prior to your first rental. I am self- employed and currently repairing my credit so I am a little nervous about getting financed through a bank just yet. How did you find you owner financed deal?

After researching and studying REI pretty heavily over the last 2-3 months (about 20-30 hours a week worth) and building up some good contacts, I'm partnering with another investor (he's providing the financing) and we've put an offer on a FannieMae Homepath property near me. We're planning on flipping this one for a projected $12-$15k profit on the backend and now I've got my eye on a vacant FSBO property a couple of blocks from me in a good area that I may try an owner-finance and then rent it out.

I initially was looking for a primary residence to buy with a friend in Orange County, Ca. Once we started looking we realized that if we moved out and went our separate ways, but kept the unit as a rental that we would have been close to negative in cash-flow. 

I randomly came upon the BP Podcast and heard some people taking about buy and holding rental property, so I pitched the idea to my friend that was going in on the primary residence with me. We switched gears and started looking for rental property in the town we both grew up (that gave us local knowledge). 

Once we started looking in our hometown, it took about 2-3 months; however, the total from looking for the primary to switching gears was about 8 months. We bought the rental May 2013, and we have good positive cash-flow and a good tenant.

It took me 6 years to buy my first rental but I started studying real estate investing when I was 20 and wanted to wait until I was well informed, confident, in a financial position to do so, and found the right property I felt somewhat comfortable buying.

I have owned that property for over 10 years now and I am glad I prepared myself with good knowledge of screening tenants, taxes/bookkeeping, rental laws, purchasing rentals (multi unit), contract law, and my local market for sales prices and  rental rates before I purchased it. I believe it was a big help.

Best of luck!!!

Originally posted by @Arlan Potter:

My first rental was bought before I knew I wanted to be in the RE business. I was sitting in my accounting office minding my own business when the phone call came. My Mom called. She said that the S & L she worked at had just reposessed the house that my grandparents had lived in for ever.  The people who bought from them had gutted half of it and left a ton of junk in the house.  I bought it for $2900.00.  That's how I got into this game.  That was eleven years ago. We now own 55 units. 

 same here.

in 2008 we got an email from an agent regarding Obama's 8k first homeowner credit and wifey looked at a few houses. i was working on our bathroom at the time (complete gut) and she came back and said, "i found a great house we can rent out". i laughed and said "pffft, sure you did". 

now we have 12, going on 14 soon.

"@Cory Binsfield I am currently in a situation similar to yours prior to your first rental. I am self- employed and currently repairing my credit so I am a little nervous about getting financed through a bank just yet. How did you find you owner financed deal?"

Sharlisa, I'd pick a target zone for your rental business and then become an expert in that area. My first deal was in my zone and I found it by driving through the neighborhood to and from work every day. I simply called and asked if they would consider owner financing. 

It takes forever to find a deal this way and I wouldn't necessarily recommend this approach as your only source of leads. 

Here's a link to a great post from the tallest guy on BP Duplex post Make sure you visit the link on finding decals. 

One more off the wall tip. 

Once you pick up a few properties, make sure you build rapport with your neighbors. I used to mow all my lawns and picked up a number of sweet deals by cutting my grass on my rentals and even helping a neighbor from time to time by cutting her grass. 

People thought I was crazy to mow my own properties but I easily banked $100,000+ in found equity by mowing my lawns and then buying the house next door before it was up for sale. 

Get your credit score up, save for a down payment and keep learning. Do this at the same time (do not try to fool yourself into believing you should build credit first, save second, etc) You need to take massive action to create massive results. 

Even if your totally broke, you can spend time learning on BP while becoming an expert in your local real estate market. You should be able to drive by a house and know exactly what it would sell for along with the potential rent. Attend open homes and act like your already a big shot investor and tour listings. 

Good luck!

I bought my first rental as my first primary residence. I took 6 months to get to know the area while renting myself, then bought my first home. I didn't even consider REI at the time other than as a roof over my head. A few years later, when I got orders to move, I turned it into a rental, and bought another home, which I live in now.
I just bought my first "deal" about a month ago, which I have no intention of living in myself. That one took a few months to find, once I started looking. I worked with the same realtors I bought my home with, and they are investors, too. They knew what I was looking for and didn't waste my time with properties that weren't potentially good investments.

I bought my first investment home by accident. I was being deployed and I did not want my wife to be at our how 1700 miles away from the closes relative that we trust. So I packed her up and sent her back to Texas. She lived with her brother for about a year then moved in with her mom and dad for about 6 months when she called me up and told me a property that her grandfather owned came up for sell. I looked at our finances and found we could afford it since the man was willing to take money down and payments we could afford. When I came back two years later and three years after that we stated renting it out. Now 6 years later we have the same renters and they are happy.

Then my mother passed this past October and we had to do something with that property. I decided that we might as well rent it because I would never live there again. So we received several call and we settled on a tenant and they pay on time every month. 

This may we closed on another house and now we are proud owners of three rentals with two year lease contracts. They all pay on time and it has worked out well. 

This all started in 2008 and it was all by accident. Take your time and wait for the right property. You will be glad you did.

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Most of mine have been MLS deals too. I've learned some ways to find what I call "hidden MLS deals". But they're not just all over the place all the time. The really good deals happen, but not every day. And you have to really hunt for them sometimes.

About 2 1/2 months - an REO, it took some back-and-forth to agree on a price. My second one (once I decided to buy it) closed in one month. Sellers wanted OUT!

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