What do I need to know before buying an investment property?

Question

I am trying to purchase my first investment property, but unsure of the do's and donts. Or what I should look out for as an first time investor.

Scott E. · Answer

Here's my 2 cents of the path to follow if you're brand new.

1) Spend 2-3 months in an education phase. Dedicate at least an hour a day to the forums, blogs, and podcasts here. Read a book or two as well.

2) Pick your niche (are you going to wholesale, flip houses, long term rentals, short term rentals, commercial, etc)

3) Spent 1-2 months networking with everybody in town and sharing your goals (real estate agents, contractors, other investors, title companies, hard money lenders, private equity lenders, stagers, designers, architects, etc)

4) Analyze 100 deals that you never plan to actually pursue. Run the numbers as if you were buying them yourself. Calculate every penny. Play out worst case scenarios. Make a plan A, B, and C for each deal.

5) Do your first deal

Taylor Dasch · Answer

The most important thing to know IMO is your goals and your market. You should find a good REA that has experience investing and learn from them. Analyze deals daily, this way you know when you come across a good one and are ready to jump on it rather than waiting, because another investor who knows the market is already on it and has likely made an offer. Know your criteria and what will get you to your goals, as well as the risks you are willing to take to get there. I like SFH because there is less vacancy and typically a higher quality tenant. But Multi-family will get you to your cash flow goals quicker.

Dont just buy anything you see because it is cheap/attainable. Dont rely 100% on anyones word that something is a good deal. Dont sit around analyzing deals without taking any action.

I hope this helps!

Dont just buy anything you see because it is cheap/attainable. Dont rely 100% on anyones word that something is a good deal. Dont sit around analyzing deals without taking any action.

I hope this helps!

What do I need to know before buying an investment property?

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