Purchasing first rental property

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Purchasing first rental property

Trevon Burton
Investor · GA · Member since 2025 · 3 posts · 13 votes

Hello BP community, 

I am a new investor who is in the process of buying my first rental property. I have gotten an pre approval letter from the bank for a mortgage loan, seeing that the interest rates are high right now, it's looking like my room for profit is limited. Is now a good time to go through with this or take the capital I have and try to invest into another real estate deal? I am located in GA!

Just a quick background on myself- I started an Airbnb but didn’t own the property, therefore I didn’t have much valuable insight as to what investment options I could make, so I would love some input from you experienced investors on the right moves to make. 

Thanks in advance!

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Denise SuppleeBusiness Member
Realtor · Willow Grove, PA · Member since 2017 · 974 posts · 641 votes
10mo

Hi @Trevon Burton and welcome!! It’s key to focus on cash flow and returns rather than just getting into a property, since interest rates are so high it is very important to carefully run the numbers, including mortgage, taxes, insurance, and maintenance, versus expected rent to see if the investment is viable. If the profit margin is too tight, it may make sense to wait for a better deal or continue building capital until the numbers work more comfortably.

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  • Benjamin Lancaster
    Lender · Austin, TX · Member since 2022 · 24 posts · 4 votes
    10mo

    What's the value of the property and where is it located?

    1Reply
    • Trevon Burton
      OP
      Investor · GA · Member since 2025 · 3 posts · 13 votes
      10mo
      Quote from @Benjamin Lancaster:

      What's the value of the property and where is it located?


       I have been looking in the Columbus, GA market. I have not settled on 1 property yet due to the ones I have looked at the numbers being very tight as far as rental profit margin. I was looking or homes that are move in ready or may just need very minor cosmetic repair.

      0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    10mo
    Quote from @Trevon Burton:

    Hello BP community, 

    I am a new investor who is in the process of buying my first rental property. I have gotten an pre approval letter from the bank for a mortgage loan, seeing that the interest rates are high right now, it's looking like my room for profit is limited. Is now a good time to go through with this or take the capital I have and try to invest into another real estate deal? I am located in GA!

    Just a quick background on myself- I started an Airbnb but didn’t own the property, therefore I didn’t have much valuable insight as to what investment options I could make, so I would love some input from you experienced investors on the right moves to make. 

    Thanks in advance!


    Have you ran the numbers as both a BRRRR and a flip?

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  • Joshua Hardin
    Investor · Chattanooga, TN · Member since 2023 · 175 posts · 108 votes
    10mo

    Trevon, does the deal make sense? Do your numbers add up? Meaning does it work for everyone in the "deal"/ connection? Equity sharing

    0Reply
    • Trevon Burton
      OP
      Investor · GA · Member since 2025 · 3 posts · 13 votes
      10mo
      Quote from @Joshua Hardin:

      Trevon, does the deal make sense? Do your numbers add up? Meaning does it work for everyone in the "deal"/ connection? Equity sharing


       The deals I have been seeing have been your average single-family homes. Seeing the area and the rates the numbers are a bit slim so not really sure it there is much room for profit, so I have not settled on 1 property yet.

      1Reply
    • Joshua Hardin
      Investor · Chattanooga, TN · Member since 2023 · 175 posts · 108 votes
      10mo
      Quote from @Trevon Burton:
      Quote from @Joshua Hardin:

      Trevon, does the deal make sense? Do your numbers add up? Meaning does it work for everyone in the "deal"/ connection? Equity sharing


       The deals I have been seeing have been your average single-family homes. Seeing the area and the rates the numbers are a bit slim so not really sure it there is much room for profit, so I have not settled on 1 property yet.


       The "profit' is/ can be small. Which gives you the discipline to attract the next "deal" and the next one.. It's momentum. If you were to obtain a large sum in the beginning, chances are most people would stop.. Real Estate investing, in my eyes is serving everyone in many, many, mmmaaannnnnyyyyyy different ways!! Stories, shared equity, wealth, etc... So, Trevon? How will you serve many? "Legacy isn't built alone, it's built together"!

      0Reply
  • Nadeem Alamgir
    Real Estate Agent · Member since 2023 · 831 posts · 577 votes
    10mo

    @Trevon Burton

    Rates are high, but buyers are still finding deals by adjusting their criteria, using different strategies, leveraging lower demand, and sourcing inventory off market.

    If the cash flow feels too tight, consider looking in a different market where the rent to price ratio makes more sense.

    0Reply
  • Denise SuppleeBusiness Member
    Realtor · Willow Grove, PA · Member since 2017 · 974 posts · 641 votes
    10mo

    Hi @Trevon Burton and welcome!! It’s key to focus on cash flow and returns rather than just getting into a property, since interest rates are so high it is very important to carefully run the numbers, including mortgage, taxes, insurance, and maintenance, versus expected rent to see if the investment is viable. If the profit margin is too tight, it may make sense to wait for a better deal or continue building capital until the numbers work more comfortably.

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    3Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    10mo

    Rates are higher than they were, but historically (ie not the last 10 years) they are pretty normal.  Run the numbers on a 30 year mortgage and see where you end up with the properties.  If you are doing a long term rental, you get a return over the long run.

    1Reply
  • Kelly Oltmann
    Member since 2025 · 3 posts · 2 votes
    10mo

    Exactly what Denise said above. You need to run the CAP, cash on cash and IRR. The deals I put together in my local markets for investors tend to have a 14% to 19% IRR. That is based on the net operating income and cash flow after we factor expenses such as vacancy, down payment, maintenance reserves, p&i: if applicable, taxes and improvement costs. There are good deals out there, you just need a knowledgeable agent to help you find them and eliminate the layers of risk to ensure it cash flows. Good luck! ~Kelly

    1Reply
  • Arman AhmedPro Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 917 votes
    10mo

    @Trevon Burton

    Hey Trevon, congrats on getting your pre-approval and taking the first big step toward ownership. High rates definitely squeeze cash flow right now, but if you find a deal that’s undervalued or has strong rent potential, it can still make sense, especially if you plan to refinance later when rates drop. You could also explore markets with lower entry prices or creative financing like seller carry or house hacking to offset payments. The key is buying for long-term fundamentals, good location, solid tenant demand, and positive cash flow potential, even if it’s modest today.

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    2Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    10mo

    @Trevon Burton

    can you house hack?  that is the best way to get started.

    1Reply
  • Aaron ZimmermanBusiness Member
    Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
    10mo

    I would recommend house hacking to get started. Lowest down payment, reducing rent, building equity, and it's repeatable. Lot of ways to win with the house hack. 

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  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    10mo

    @Trevon Burton
    There is always going to be a reason not to invest: Rates are high, prices are high or prices level off and you think they are starting to come down so you wait. You can always make a case why you shouldn't invest that doesn't mean there aren't opportunities out there. As long as the numbers make sense, jump on an opportunity instead of trying to time the market

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  • Account Closed
    Member since 2025 · 47 posts · 23 votes
    10mo

    Hello Trevor, 

    Congrats on taking the first steps toward your real estate investment journey! Getting pre-approved is a great start, and it’s smart to consider how interest rates affect profitability.

    Even with higher rates, there are ways to structure deals to improve returns. For example, you can often buy the interest rate down—your banker can guide you. Additionally, there are many strategies to increase profits if you know where to look.

    Many agents focus primarily on residential sales or leasing for primary homes, which means they often don't fully understand the nuances of investment properties—things like ARV (After Repair Value), STR/LTR/MTR (short-, mid-, or long-term rentals), market demographics, employment trends, local businesses, transportation, and other market amenities. These factors can significantly impact your return.

    That's where a seasoned commercial advisor comes in. Commercial advisors work with business owners, corporations, and investors like yourself. We network across hospitality, healthcare, land/development, industrial/flex, office sectors, and more—everything that impacts your potential ROI. Out-of-state investing can also be a great option; the key is finding markets that are currently hot—or emerging markets that are on the path to growth. A truly connected and knowledgeable commercial advisor can help you identify these opportunities again because most agents in residential are local and not national or international.

    I know people hesitate because hiring the right team can cost money, but the truth is, it only really costs if the deal goes through—and with the right team behind you, it’s an investment you won’t regret. For example, my cousin@Jason Wray and I provide a one-stop shop for investors. He brings finance programs, knowledge of the best routes, and strategic insights, while I bring a vast network and expertise in asset management, property management, and construction/development.

    Not only do I own these companies, but I also bring a multi-generational network of contractors, developers, heavy equipment operators, plumbers, HVAC technicians, electricians, and more—trade professionals who can be leveraged for any project. I hold licenses and certifications in property management (CPM, ACOM), home inspection, and contracting, ensuring our clients are fully supported.

    Our approach is simple: we build relationships, keep your best interests at heart, and create wins. Big or small, local or out-of-state, we help investors set up for success and leverage every opportunity possible. Please feel free to message or reach out to me anytime for advice and or anything. I love building wealth for people. 

    0Reply
  • Jordan Outen
    Member since 2025 · 18 posts · 6 votes
    10mo

    Run the numbers on the property you're interested in. See if it'll be more beneficial to rent or flip. Make sure as well that with either one you do that you'll actually be profitable before a year is up

    0Reply
  • Allie McAlister
    Memphis, TN · Member since 2024 · 180 posts · 223 votes
    10mo
    Quote from @Trevon Burton:

    Hello BP community, 

    I am a new investor who is in the process of buying my first rental property. I have gotten an pre approval letter from the bank for a mortgage loan, seeing that the interest rates are high right now, it's looking like my room for profit is limited. Is now a good time to go through with this or take the capital I have and try to invest into another real estate deal? I am located in GA!

    Just a quick background on myself- I started an Airbnb but didn’t own the property, therefore I didn’t have much valuable insight as to what investment options I could make, so I would love some input from you experienced investors on the right moves to make. 

    Thanks in advance!


     Hey Trevon!

    Welcome to BP, and REI. Congrats on your pre-approval.

    A bit of info that others aren't really paying attention to - Are rates still trending higher now? Yes. Does that mean we are in somewhat of a market freeze because buyers are waiting for rates to go down? 100%. Now is a great time to " zig when others zag " and lock up some deals that other buyers aren't jumping on because of the rates. Remember, you can refi when rates are lower, but if you wait to buy until rates are low like lots of others are doing, it will be tougher to get a deal and you'll have to deal with a lot more competition. This is the exact advice we are giving our Memphis investors right now, and lots of our clients are getting great discounts because they're taking full advantage of these market conditions. I'm happy to connect with you and let you know how to practically apply this info in Memphis and get started with a good investment property. Seasoned investors are buying now. 

    Best of luck!

    1Reply
  • Jeff Roth
    Real Estate Consultant · Ann Arbor, MI · Member since 2022 · 462 posts · 251 votes
    10mo

    Hi Trevon in Georgia-

    Great question! You just got pre-approved and are ready to make your first investment in a rental property.

    You are worried about rates and margins on your investment.

    If you can buy a value-add duplex near you, ideally with tenants in place, I would look at doing that or live in one side of the duplex and put less down.

    That way, you start with cashflow and can prepare to improve the property and increase rents when a tenant moves and you should always have a rent check coming in.

    If you buy it well enough, you can refinance the property and pull out a home equity line of credit and go buy the next duplex in a short period of time.

    If you cannot find that near you, there are several markets in Michigan where you can and we have experienced property manager partners who can handle the rehab and manage the property well.

    Top Your Success!

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  • Elealeh Fulmaran
    Specialist · Member since 2025 · 483 posts · 270 votes
    10mo

    Rates feel heavy right now, so make the deal do the work: lock a clear buy box, run a quick rent‑to‑price scan, then stress‑test with today's rates, taxes, insurance, PM, vacancy, and CapEx reserves; if it's still positive and you like the neighborhood fundamentals, buy and hold, then refi only when the math beats the cost of two closings. If it's thin, pivot instead of pausing: target tenant‑occupied hybrids with below‑market rents you can raise at renewal, ask for seller credits, explore DSCR or small local portfolio loans, or use private money short‑term and refinance after stabilization. Your next step in GA: pick one submarket, analyze five listings with a cash‑flow calculator using conservative rents and current rates, and make one offer that pencils even if rates don't drop.

    0Reply
  • Jordan RayBusiness Member
    Real Estate Agent · Memphis, TN · Member since 2023 · 630 posts · 322 votes
    10mo
    Quote from @Trevon Burton:

    Hello BP community, 

    I am a new investor who is in the process of buying my first rental property. I have gotten an pre approval letter from the bank for a mortgage loan, seeing that the interest rates are high right now, it's looking like my room for profit is limited. Is now a good time to go through with this or take the capital I have and try to invest into another real estate deal? I am located in GA!

    Just a quick background on myself- I started an Airbnb but didn’t own the property, therefore I didn’t have much valuable insight as to what investment options I could make, so I would love some input from you experienced investors on the right moves to make. 

    Thanks in advance!


    Welcome to BiggerPockets! Congrats on taking that first big step toward buying your first rental—that pre-approval letter is a huge milestone. You're asking a really smart question, and honestly, timing the market matters less than buying the right deal in the right market. Even with higher interest rates, strong cash flow can still make sense if you focus on markets where the numbers work. That's exactly why so many investors from around the country are putting their money into Memphis right now—it's landlord-friendly, rental demand is steady, and you can still find properties that hit the 1% rule and cash flow even with today's rates. Another option worth exploring is using short-term or hard money financing, which many investors here use to cover 100% of the purchase and 100% of the rehab—most end up with around $10K out of pocket per deal. Once the property is stabilized, they refinance into a long-term loan when rates improve, which is essentially the BRRRR strategy. It lets you keep building without sitting on the sidelines waiting for "perfect timing." The key to making that work is having local expertise—an investor-friendly agent who also owns rentals and partners closely with property managers and contractors to keep projects and tenants on track. In the meantime, start practicing by looking at properties, analyzing ARVs, rents, and market trends, and getting familiar with the neighborhoods and overall layout of Memphis so you understand what you're buying. Go ahead and start connecting with an investor-friendly agent like myself and build relationships with property management and lending contacts now so when you're ready to move forward, your full team is in place and you can act with confidence. Feel free to reach out, talk soon!

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  • David Webb
    Lender · Sacramento CA · Member since 2025 · 15 posts · 8 votes
    10mo

    Hey Trevon, congrats on your first investment! I'd be glad to go over lending options and get you to a level where you feel comfortable making the best decisions. Always happy to help! Reach out anytime 

    0Reply
  • Adam BartomeoBusiness Member
    Real Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
    10mo

    Just one comment - Interest rates are NOT HIGH! Prices are...

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    10mo

    @Trevon Burton many new investors are figuring out what investors BEFORE the Great Real Estate Crash were forced to understand - paying market price for real estate makes it difficult to cashflow.

    Old saying - You make your money when you buy a property.

    Which translates to, the future profit potential of a property is defined by the terms you purchase it with (price, financing, down payment, interest rate, etc.).

    I paid 10% below market for my first rental (a duplex) and thought it was a deal.
    - It turned out to be an okay purchase over time.

    Recently paid full asking price for another duplex, but got seller financing with a low interest rate, so the property cashflows.

    We'd need more info on YOUR purchase to give you any feedback.

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  • Vaughn Croxton
    Member since 2025 · 10 posts · 1 vote
    10mo

    Hey, congrats on getting your first pre-approval — that’s a big step!

    Totally get where you’re coming from. Rates are higher right now, and that can make the numbers feel tight. But here’s the thing: higher rates have also cooled competition a bit, so some investors are finding better deals or negotiating stronger terms than they could a couple of years ago.

    If the deal still makes sense with today’s rates — even if cash flow is modest — it could be worth moving forward. You can always refinance later if rates drop, but you can’t go back and buy at today’s prices. On the other hand, if the numbers don’t work now, it’s smart to wait or look for something smaller or creative that does.

    No right or wrong answer — just make sure the deal fits your goals and budget today, not based on “what if” rates.

    0Reply
  • Bill Goodland
    Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes
    10mo
    Quote from @Trevon Burton:

    Hello BP community, 

    I am a new investor who is in the process of buying my first rental property. I have gotten an pre approval letter from the bank for a mortgage loan, seeing that the interest rates are high right now, it's looking like my room for profit is limited. Is now a good time to go through with this or take the capital I have and try to invest into another real estate deal? I am located in GA!

    Just a quick background on myself- I started an Airbnb but didn’t own the property, therefore I didn’t have much valuable insight as to what investment options I could make, so I would love some input from you experienced investors on the right moves to make. 

    Thanks in advance!


    The days of just finding a deal on the market with double digit cash on cash returns are over assuming you want to stay out of some rough markets. My advice is to focus on value add deals that cash flow something. My current strategy is to find off market deals, fund them with hard money and if I can leave less than $15,000 in the deal(ideally a perfect BRRRR and leave $0 which is rare) and it will cash flow something, I'll do that deal all day long. My typical ARV for a rental is somewhere around 200k so if I build around 40k of equity in each deal, if you have another source of active income and continue building a portfolio with that strategy, one day you're going to be very wealthy and those rentals are going to be cash flowing a lot better once interest rates are more favorable, rents go up, or you trade that equity into a better cash flowing asset.

    0Reply
  • Kyle Vogeler
    Rental Property Investor · Emmaus, PA · Member since 2021 · 152 posts · 85 votes
    10mo

    Trevon, 

    I would not use 2020/2021 as a reference point for interest rates - if you do, almost any other point in history will have "high rates". It is unlikely that rates dip back down below 3%, and if they do happen to get that low again, they wont stay there long. The rates we are currently experiencing are far closer to historical averages. 

    That being said, yes there are good deals out there, but not every home for sale is a good deal. Run you analysis, be conservative in your numbers, and make offers that make sense. You will likely make multiple offers before officially getting under contract, but that is all part of the process. If it were easy, everyone would do it. Keep at it, you'll have a sizeable portfolio in no time!

    1Reply
  • Al Bazzy
    Real Estate Agent · Livonia, MI · Member since 2016 · 32 posts · 10 votes
    10mo

    Hey Trevon, welcome! Rates are definitely tough right now, but it’s also a good time to learn how to find value. Solid cash flow deals still exist, especially if you stay patient and run your numbers carefully. Some investors I know are also exploring turnkey rentals in more affordable markets to offset the higher financing costs. If you ever want to chat more about how that works, feel free to reach out!

    0Reply
  • Bernice RetzloffPro Member
    Memphis, TN · Member since 2024 · 234 posts · 100 votes
    10mo

    Hey @Trevon Burton! Congrats on getting that pre-approval and getting serious about your first rental! That’s a huge step, man.

    Totally hear you on the interest rates. A lot of new investors are running into that same challenge right now. The key thing is making sure the numbers still work, even with today’s rates. If the property cash flows after accounting for higher interest, maintenance, and reserves, that’s actually a great sign. Because when rates eventually drop, your cash flow only improves.

    That said, if deals in your area are too tight, it might be worth exploring out-of-state markets where prices and returns are stronger. I’m a real estate agent based in Memphis, TN, and I help a lot of out-of-state investors (especially from higher-cost states like Georgia, Texas, and California) build rental portfolios here. Memphis still offers solid rent-to-price ratios, landlord-friendly laws, and stable demand. Making it easier to hit your cash flow goals even with current rates.

    If you want, I’d be happy to walk you through what numbers typically look like here and what kind of properties tend to perform best. Whether you buy now or wait, running a few sample deals in different markets will give you clarity on what’s realistic for your goals.

    You’re in the right mindset already! Asking questions, comparing strategies, and thinking long-term. That’s how every great investor starts.

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