I'm looking at acquiring my first rental property, and I'm curious how most of you acquire yours. Do you typically go through a realtor, or do you go for off-market deals? I have found that several of the listing prices for houses in my area are such that the Cash on Cash return is going to be close to 5% (which is what I can get out of the stock market). I'm looking to house hack, so the areas I can look in are more closely limited. Should I attempt a BRRR strategy or something similar? I'm just looking to get an idea on good approaches to gaining rental properties.
In order to get the best deal and the highest cash on cash return, you will need to find a property you can buy rehab and add-value. These homes will need floors, kitchen, baths paint, etc. You will need to make sure you have the funds to pay for the rehab.
I get deals off and on market. I have built a network of brokers that send me deals off the market and I search online for what's available. My last 3 deals have all been on market. You just have to look every day and act fast. Honestly, you can find deals that are public you just gotta know what a deal looks like.
@Daniel Howard I bought my first house with no money down and moved into it. I used a Realtor (before I became one) Then we moved into a basement apartment and rented out the house. That was back when you needed two years of rental history to count rental income to help qualify for the next house. We did this two times before we moved into our current house. Then we started buying with larger down payments and hard money.
For my buyers who contact me from bigger pocket in situations like yours, I recommend just getting into your first home. There is so much to learn and so many ways to go about it. Where you don't have the pay the buyer's agent fee if you buy off the MLS it's the best way to get advice. Just make sure you work with a Realtor who understands House hacking the BRRR method. It depends a lot on the downpayment you have for what would make the most sense. If you have no money down house hacking is the best. You can move in and get renters to live with you just keep in mind most cities only allow 3 unrelated individuals living at one address. If you have a down payment and can do the renovation you could do the BRRR just remember to refinance the cash back out you have to wait 6 months for the money to season. I had one lender do it at 4 months but that made the interest rate 1.5% higher than the market, if we hadn't had the hard money it would have been worth it to wait for the 6-month mark and get a better rate.