Need advice on taking my first step in Real Estate Investing

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Need advice on taking my first step in Real Estate Investing

Syed Ahme
Charlotte, NC · Member since 2016 · 13 posts · 3 votes

Hello BP Community,

First of all thanks to BP for creating such an amazing platform where all real estate enthusiasts can learn and connect. I live in Charlotte, NC and looking to first invest locally. I'm looking to first start off with a potential rent generating property to add to my rental portfolio. I am very new to real estate investing and I would like as much advice or resources as possible.

I'm planning on investing in a town house within a close proximity to university and schools so that I can get to rent it out easily. I have a decent and stable job but as my first project I want to start off with something small and that's why I'm thinking of a town home instead of SFH. Since I'm currently living in an apartment so I want to move into a town home of my own and start looking for an opportunity to rent it out. Once I rent this one out, I will buy another town home or SFH. Move-in and then out once I'm comfortably able to rent the second one. I want to follow this strategy until I add a couple to my portfolio. As a newbie is this a recommended approach? Is starting of with a town house a wise approach? Has anyone at BP followed a similar or a different path to achieve the same goal?

What are the key aspects in terms of analysis and inspection of a property with a motive of renting out in the near future? - applying to both town house and SFH.

Finally, how and where can I know whether there's a real estate meetup group in my locality?

Looking forward to hear and connect with my fellow BPs.

Thanks & Regards,

Syed Ahmed

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Jake Oreskovich
Rental Property Investor · Cleveland · Member since 2016 · 29 posts · 16 votes
10y

Syed, I agree with @Melissa N. on the town home. If you have the option I would go for a single family home. From my experience they seem to rent easier than everything else. What you are doing is exactly how I built my business.

Have you considered a duplex? When I was brand new I was able to purchase a duplex with an FHA mortgage. Yes, it was difficult but it was an awesome investment for me. With the duplex I was able to live in one side and rent the other which generated a small $100 monthly profit for me. However, the important part is that I learned to become a landlord in a very low risk situation. It's easy to do maintenance, collect rent or even revamp a unit if you live in the same building! The duplex was how I learned to be a landlord.

This may or may not be possible for you at the moment, but just thought I'd throw it out there for you to ponder.

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  • Melissa N.
    Rental Property Investor · Charlotte, NC · Member since 2016 · 293 posts · 88 votes
    10y

    They call it "house hacking" and it can be an effective approach. You'll get a low interest rate and help paying the mortgage. Be careful with townhomes,IMO, because of monthly fees. As your rents go up so can your HOAs and they may outpace gains.

    Good luck! UUsethe rental property calculator and there is a deal analysis forum too. They are great! 

    Good luck and feel free to reach out.

    1Reply
  • Syed Ahme
    OP
    Charlotte, NC · Member since 2016 · 13 posts · 3 votes
    10y

    Thank you Melissa. You made a good point about HOAs. I'm wondering if I could use the Zestimate provided by Zillow to get an estimate of the rent. In most cases I noticed even after HOA the math shows some cash flow on top. I will check those resources.

    0Reply
  • Jake Oreskovich
    Rental Property Investor · Cleveland · Member since 2016 · 29 posts · 16 votes
    10y

    Syed, I agree with @Melissa N. on the town home. If you have the option I would go for a single family home. From my experience they seem to rent easier than everything else. What you are doing is exactly how I built my business.

    Have you considered a duplex? When I was brand new I was able to purchase a duplex with an FHA mortgage. Yes, it was difficult but it was an awesome investment for me. With the duplex I was able to live in one side and rent the other which generated a small $100 monthly profit for me. However, the important part is that I learned to become a landlord in a very low risk situation. It's easy to do maintenance, collect rent or even revamp a unit if you live in the same building! The duplex was how I learned to be a landlord.

    This may or may not be possible for you at the moment, but just thought I'd throw it out there for you to ponder.

    3Reply
  • Syed Ahme
    OP
    Charlotte, NC · Member since 2016 · 13 posts · 3 votes
    10y

    Thank you Jake. Interesting...I never thought about duplexes. Honestly I have no idea about them but I would like to look for one in my city. It makes good sense regarding renting one side while living in the other until I become comfortable land lording. Good information.

    Based on thr information so far it seems to me that town homes aren't in demand when it comes to rent.

    0Reply
  • Paul Timmins
    Specialist · Rockland, MA · Member since 2010 · 7k+ posts · 2k+ votes
    10y

    @Syed Ahme

    I second the thought of a small multi. Your profession should be the source of all the private money you will need.

    Student housing can produce 2-4 times more rent you rent per bed not per unit. You include utilities cable and internet. Use auto deduct , have the parents guarantee and keep them out of the basement. I have an article I wrote on student housing EMAIL me if you want a copy.

    Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers (cash buyers). Find them through Google and meetup.com

    Two Great reads, I bought both J. Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbook

    Consider checking out HUD homes for small multi's owner occupied gets first crack.

    Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

    http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

    Good Luck

    Paul 

    1Reply
  • Irene Chen
    Investor · Tampa, FL · Member since 2016 · 26 posts · 7 votes
    10y
    I also agree on looking into multifamillies. This was my first property and it allowed me to also live in a nicer area to save up for more properties by renting out the other unit. I heard HOAs may become a headache because they can make decisions that affect how you write your leases (for example requiring that the leases need to be 2 years) which may make it more challenging to find tenants.
    1Reply
  • Account Closed
    Investor · Los Gatos, CA · Member since 2015 · 32 posts · 5 votes
    10y

    Hi Syed,

    My first property was a condo. My wife and I bought it and rented out a room. It was in a highly desirable rental market, San Diego, so I was able to pretty much cover the mortgage with the one room rented. The HOA does what they want and sometimes you can't predict their actions, ie the board changes and goes in a different direction than the previous one. Or in my case a board member has a condo under water and wants to try and force appreciation through community improvements. The HOA has gone up $10 and rent has stayed the same. For me it doesn't matter as the rental demand is high in the area and the rent is decent.

    It was great experience landlording being so close to the tenant. Its a lot easier to learn the managing process when you don't have to travel to your tenant. 

    I now rent the whole unit and it has treated us well. Biggest thing I could recommend is learn about tenant screening. If you go through with your plan you are going to be living with this person and having a good tenant is key. 

    1Reply
  • Brian Compton
    Contractor · Charlotte, NC · Member since 2016 · 138 posts · 63 votes
    10y

    Regarding local meetups, join this ==> http://www.meetup.com/Hobby-Millionaire-Real-Estat...

    I attend the Wednesday meetups on Tryon (been to 2, also very new to REI).

    And there's another BP group meetup at the Brass Tap that's I think the last Monday of every month. Set a keyword alert for Charlotte and you'll be able to find out others I'm sure. Those are the two I know about and have attended recently.

    Hope to meet you in person soon!

    --Brian

    1Reply
  • Corey Woodruff
    Saginaw, MI · Member since 2016 · 161 posts · 67 votes
    10y

    read  the book on rental property investing by Brandon turner. Also make sure the numbers work and you account for your actual expenses. Most new people forget hat every month th 50% roughly of your rental in one Ned's togo towards your expenses. Not in your pocket. If the numbers work then it should work if you plan properly.....

    Question.....is there an HOA FEE TO OWNING THIS TOWNHOUSE?

    2Reply
  • Melissa N.
    Rental Property Investor · Charlotte, NC · Member since 2016 · 293 posts · 88 votes
    10y

    @Syed I own a SFR in Charlotte that we rent. I wouldnt trust the Zestimate. I find it too low in many cases but you can do your own comparison using Zillow, rentometer.com, or rentjungle. You can also just search Craigslist.

    1Reply
  • Syed Ahme
    OP
    Charlotte, NC · Member since 2016 · 13 posts · 3 votes
    10y

    Thanks a lot everyone. You guys are awesome. This is great information which allows me to look at my strategy from various different perspective. I will definitely go through the resources provided here and the meetup information.

    Regards,

    Syed Ahmed

    0Reply
  • Syed Ahme
    OP
    Charlotte, NC · Member since 2016 · 13 posts · 3 votes
    10y

    @Corey Woodruff

    There's a monthly HOA fees of $180-$200 average on the town homes I was looking.

    Thanks for the book info.

    0Reply
  • Syed Ahme
    OP
    Charlotte, NC · Member since 2016 · 13 posts · 3 votes
    10y

    @Melissa Nevich,

    Thank you. I didn't know about this. Will consider them too.

    0Reply
  • Syed Ahme
    OP
    Charlotte, NC · Member since 2016 · 13 posts · 3 votes
    10y

    @Melissa Nevich,

    Thank you. I didn't know about this. Will consider them too.

    0Reply
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