When to purchase first investment property?

Question

Hi Everyone,

I am committed to getting into the rental investment game and I am starting to grow my down payment funds for my first 1 or 2 properties.

I am on track to have $20,000 by April and $40,000 15 months from now. I have a 10 year plan laid out which I am obsessed over executing!

My big question now is “when”?

When do I buy?

I bought my primary residence in 2012 and now in the midst of the pandemic I realize foreclosures might be our reality in 2021 & 2022. I’m looking to get that perfect timing again!

So if anyone has any insight to when they think the best time to start putting offers on property is please share!

Carl C. · Answer

Your chance of correctly timing the market is extremely small. If the numbers work on a property, buy it. Don't wait. The longer you wait, the longer it will take to achieve your goal. We just bought a 4 unit in the middle of the pandemic. Why? because it works. Could we get a better deal in a year or two if the market sinks? Maybe, but I can't predict the future. Turns out if we had waited, the price would have been higher because of people trying to get out of urban areas 4 months ago. Who knew. Take action, there is no right or wrong time. The deal just has to make sense.

Chris Freeburg · Answer

I really like Warren Buffet's advice about not trying to time the market. Obviously, he was talking about stock markets, not real estate, but I think the advice still applies. We have lots of data, we do our research, pick our market and our investment vehicle, but no one has a crystal ball.

I invest in Colorado, so I think it is time in the market that matters most, especially for an appreciation play like Denver.

Where are you investing? What's your market?

We are seeing low listing supply across the board, and with historically low interest rates (forecast for the next few years), buyer demand is also increasing. In this market, my goal is to secure my next investment as early as possible.

Jon Hill · Answer

@Joe Matthews I would say make sure you know your numbers and what you want to get is more important than timing the market. Plenty of people said we were due for a correction with a historic bear market, but no one knew that it would be in March due to a pandemic and that in certain markets this would actually drive prices up. I am in Denver and due to a massive lack of inventory price have continued to rise. I understand that we still could have a correction in 2021 and 2022 but hindsight is always 20/20

I really believe it comes done to knowing the numbers that work for you and analyzing deals with that in mind and then taking action when you find a property that fits. I hope that helps. Best of luck within your journey

Joe Matthews · Answer

@Carl C.

Awesome!! I so greatly appreciate this!! Everyone’s advice is really calming my nerves!!

Just getting antsy to start!!

Dylan Thomas · Answer

@Joe Matthews

When to buy... when there’s a deal. Doesn’t matter if it’s a good or bad market. A deal is a deal

Carl C. · Answer

@Joe Matthews You got this. Nerves are normal and good. If you weren't nervous, I'd be worried. Let the nerves guide you but don't let them stop you. Be cautious but move forward.

Matthew Irish-Jones · Answer

@Joe Matthews my general answer to most people is to make your first home a double, and use an FHA loan go purchase.

Great way to get into investing and keep your living expenses low.

If your asking about timing the market... no one knows.  Best time to buy is when you find a good deal that meets your goals.

Joe Matthews · Answer

I really appreciate everyone’s advice!

It sounds like everyone has about the same advice!!

Thank you everyone!!

Sean Gribbons · Answer

Perfect timing was 5 years ago because you could easily leverage the equity and have atleast 2 more properties. Everybody wants to play the appreciation game but buying real estate for appreciation is not a great strategy. Gotta weigh in the opportunity cost plus just think that money you are saving could be at work right now for you, but its not so you have to factor that into your 10 year return. I say look at deals until something stands out. Everyone I know is still buying

Joe Matthews · Answer

@Chris Freeburg

I appreciate this advice!! I will watch my data over the course of my saving period.

Thank you!!

When to purchase first investment property?

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