Staten Island, NY · Member since 2015 · 265 posts · 59 votes
Hello all, I know the basics already that I need to secure financing, get pre-approved for a loan, do my analysis on some properties I am interested in and of course find a realtor and just check out some homes. Now say that I do find a property that I close on, what inital steps should I take as a landlord/investor. Btw I will be investing about 1 hour away from my home. I live in NYC, but I am going to invest in Pennsylvania. What is the admin side of things that I should keep in regards to records/documents? Also what documents should I be giving to tenants whether they are already there or I have to find new ones?
What part of Pennsylvania are you investing in? Give us more content about the property and we will see how to help you and what suggestions we would give you.
@Eric DeVito Most of the key points have been hit, but make sure that you understand the town and county level laws before you decide to self manage. For example, in Allentown there is a local ordnance stating you must remove all snow from your sidewalk within 10 hours of the snowfall. It can be very easy to miss one of these and have to deal with violations, fines, and trips to the courthouse!
I have a couple thoughts to add. First, I own 4 properties that are 90 minutes away by car, and have found them easy to manage. I just have a local emergency contact, the guy who is my handyman. This meets code where I invest (one of the places).
I recommend reading 'Flipping Houses' by J Scott. I'm not assuming you have interest in flipping, but his book teaches you how to locate your 'backyard', the area you will invest in. Is Allentown, PA your backyard? That is a question you have to answer for yourself.
Second, in most any case, you will inherit four tenants. Tenants are people just like you and I. Learn to understand your role with tenants. Don't give in to fear of things you haven't experienced. I've had some deadbeat tenants, and I got through it, by God's grace.
Have a lawyer create your lease, a real estate lawyer. Go to your local REIA and ask for their recommendation for a real estate lawyer. I spent $800.00 on my original lease, and others ask me if I will let them use mine.
Your key job as a landlord, in my opinion, is the buy the property right. If you pay too much, it will pressure your relationships with tenants. If you buy a property that is not a value add, then you put pressure on yourself. Do your due diligence. Look at 100 deals before you buy one. Learn to recognize an opportunity.
@Varun Parkash Yes, I would ask your realtor. I use the Association of Realtor forms, but they are copywritten and can't be sent out blankly. There are places online that can assist- Legal zoom,, Cozy may have some, etc. Make sure they are state specific since there are different regulations for each state.
@Jennifer Slaughter It is just to save money monthly I suppose is the main reason. I will still account of property management in my numbers though just incase I do not decide to do it myself or I realize I cannot handle it especially being new to the game. I would be an hour or so away from my target area/property.
@David Moore Thanks for the reply David. I am actually interested in Buy & hold small multi-family properties. I'm not against flipping, but do not want to start out doing that. I would be an hour away from the property so figured I could take care of prop. management issues. My realtor does know about that law and he said he would act as an emergency contact if need be. He has worked with many investors out-of-state before. Has a lot of knowledge.
I know I have a lot of to learn about being landlord. I am trying to read a lot of books and talk to different investors on here. Hands on experience though would be best. Yes I do have to find a good real estate lawyer as well.
3 R's. Read (books and BP), research, repeat. Don't forget to buy! Watch the market you plan to buy in for 6-12 months in order to see cycles, what sells fast and what doesn't, but don't hesitate to buy before then. If you're just starting out, it's better to miss on a great deal than to buy a bad one, more deals always show up.
I like @Shawn Ackerman's response. I analyze deals including the rate I pay a property manager. If it makes sense with a PM taking an industry standard rate then it's usually a go for me. Keep in mind also, that one of the marks of a great deal is a self managed property where the owner is simply burned out and not taking the best care of the property. Don't be "that guy" who's letting a property go in a couple of years (also called "Buying yourself a job"). If the cash flow makes sense *with* a manager's fee you can have the option to add one later if you find you're ready to free up some time.