Updated 1 day ago on . Most recent reply
First Property Mistakes
For those who bought their first property recently and/or those who remember the process of buying their first property well: what did you find that you were most unprepared for/ surprised by during the closing process? With so many aspects of buying a first property to keep in mind, I can't help but feel like I'm going to miss a crucial piece of information. Thanks in advance for any insight!
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#4 Starting Out Contributor
- Rental Property Investor
- Ellsworth, ME
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#4 Starting Out Contributor
- Rental Property Investor
- Ellsworth, ME
You need way more than 20% down. The loan/closing costs, make ready expenses, and cash reserves needed are just more than expected.
Let's take a common scenario - investor wants to buy a $200k rental, they think $40-45k in cash will get them into it. Realistically, you probably need $60-65k. Ask anyone who as ever bought a house - the only guarantee is that you are about to spend a pile of money. There will be a stabilization period in the first year or two where you feel like all you do is spend money on this stupid house.
Other than that, buy the property you want to own the most 10 years from now, not the one that looks good on a spreadsheet in year 1. Good luck and feel free to reach out if you think that I can be helpful. I have absolutely nothing to sell.