Step By Step Guide to your First Rental Property
Purchasing your first investment property can be scary, intimidating and downright confusing. That's why before you even think about purchasing an investment property you should learn and cram yourself with knowledge. Knowledge will make you unstoppable in this industry, you will know how to differentiate a good deal from and "ehh" deal from a "money pit" deal and that's the key to success. Not only that but you need to be able to understand the lingo used in real estate- you might be a newbie but you don’t want to come off like a newbie! Listen to podcast, read books, ask others that are doing what you want to do, watch YouTube videos, make this your passion and immerse yourself in the “how”.
Once you've acquired the knowledge necessary, it's time to identify your “why”. Is it your kids, family, peace of mind, leaving your current job? What are you trying to accomplish? Knowing your why and being clear as to the reason you are perusing this in the first place will keep you motivated when things get tough. You are going to face many obstacles as a real estate investor. People will doubt you; you will doubt yourself; this business will require more hours than in your current 9-5. Grit, persistence and an impervious commitment to your decision will be key to your success.
Next, make a plan and stick to the plan. Why is this important? Once you start actively searching for a good deal you need to have a clear goal. Decide on a strategy and stick to it. Filter your search results to show only properties that meet those requirements. This is going to make your search process so much easier and you will find a property a lot faster. If you’re looking for small multi-family properties with at least 20% equity do not waste your time on single family houses at market value because “the pictures look nice”. Don’t even click on the listing, avoid distraction maximize efficiency and execute your plan.
Make offers! Making offers is FREE, before you make the offer make sure the numbers check out and if you’re not sure add a contingency. Don’t get discouraged when they say no, stop and ask why they rejected your offer- was the offer price too low, are they looking for a specific number, do they want a quick close- identify that “why not” and if it’s something you can budge on you’ve got a deal!
Lastly- stay true to your numbers. As clique as it sounds- Numbers don’t lie- stick to your desired returns and available funds.