Rental Property Investor · Waycross, GA · Member since 2018 · 39 posts · 40 votes
What single piece of advice would you give to a newbie to share the hind sight you've no doubt experienced by this point. Knowing what you know now, what would you have done?
@Margie Fuller I would keep my eyes on the prize. I got started in the hot time and got money. Then I decided to invest in a restaurant chain and it all fell apart. Now for the past 6 months I am trying to get back into real estate. Just stick with what works. ALSO, never trust a wholesaler.
@Jason D. "I would have started 10 years sooner, and bought a multi unit to househack." - my wife and I say that same thing all the time, we should have started buying and househacked right out of college!
Landlording: Wait a little longer to find a better tenant. Don't just go with the first candidate, stick to your qualification standards. Be strong! I almost got sucked in with the first prospective tenant, with an eviction on their record. They wasted some time, but thankfully I refunded their partial deposit before they moved in, then stuck it out for another month to find the best tenant. Oh yeah... and don't accept partial deposits, just the full amount :) .
Buying: Ask seller for more before closing - ie, CLUE report to see any past insurance claims that could increase your premiums. I would justify a lower offer/price with reason, in writing. I would have included repairing the droopy ceiling, fixing the cat pee stench etc. Use bigger pockets report tool (from the calculators) to showcase repair items and to back up your offer with reason. I didn't do any of these things, and I could have gotten a better deal.
Selling: My first property was a condo in Melbourne, Australia. It was in a great spot, and I sold it before I got into investing, darn it! I hired an agent just before moving back to the US. First off, I should have kept it, because Australian real estate went crazy over the past 13 years and the building had a bunch of serviced apartments through a leasing company I could have worked with. Secondly, I should have vetted the agent better. After 6 months, the property hadn't sold. So, I made a surprise visit back, and it looked like he had been living there (dirty bathrooms etc). I fired him, got another agent and sold the place within 2 weeks with a reasonable profit!
However, I will take those lessons and more to the next deal. I'm not going to do everything right, especially the first time, but I'm going to keep doing real estate investments, and overcoming my fears. The most empowering thing I did was to accept that I'm going to make mistakes, learn from them when they happen, and know that I'll do better next time - and never ever give up!
@Austin P. I would choose MFRs because I view the work on my part as the same it takes to buy SFRs. The big difference is having more support to cover expenses. 4 SFRs vs 1 Fourplex...I'd choose the one transaction. When I started out, SFRs where the main goal. As far as the lessons, I understand what you mean by not jumping into something above your comfort level and that makes sense. Just from my experience I'd love to have networked with successful investors to gain insight, direction, and an action plan to start with a MFR. I'd suggest MFR whether you wanted to house hack or not. House hacking would get you in with a lower down payment using an FHA loan, and that is pretty favorable. At the end of the day, both are great investments as long as the numbers work. As you grow, your goals may change as mine have or not. I will still purchase SFRs if the numbers work!
@Sofiaan Fraval he was living there? Wow! No wonder he hadn't sold it. He had a sweet deal going. Glad you were able to sell it for a reasonable profit. Great advice!