How to buy my first property by January

Question

Gene Hacker · Answer

I suggest that you start with educating yourself on the basics of real estate investing.  Google "best selling real estate investing books", after reading a few you should have a basic understanding and I have an idea what to focus on.  Additional books that focus on what you choose could be a good next step.  And of course, posting specific questions to this forum can be very helpful.

Jasmine Benford · Answer

Hi Trevor! I agree with the two members above! I am going through the process now and hope to have my first property by December. I started by looking for an investor-friendly realtor who put me in contact with an investor-friendly lender. I say investor-friendly because they have worked with investors before or are investors themselves and can understand where I am "coming from." The lender can also work with you to decide what the best loan option would be. FHA, conventional, etc. Both have pros and cons. From there the lender will let you know what you can afford based on your credit, etc. and you can choose whether to go purchase price or you can always go lower. I read a few BP books to get started, Scott Trench has a book called Set For Life and I also read Brandon Turners book on rental properties. Both are great resources, especially Brandons'.  Hope this helps a bit! Good luck, keep us posted!

Cortney Jones · Answer

@Trevor Turner, I agree with @Gene Hacker suggestion to quickly read a few books to get a better overall understanding of real estate investing.  The house hack plan is a great starting point.

If you are wanting to buy in Dec/Jan timeframe you should be working with a mortgage broker now to take a look at your credit.  You may have some things to work on in order for an approval.  Maybe nothing of your own doing, or maybe just no credit at all.  They can help guide you in the direction of what you'll need to do (if anything) to get your credit ready and give you an idea of what you can afford monthly.  This will also help you know the price range you can afford.  Of course, don't take their word for what you can afford solely.  Know your limits and your lifestyle too.  If they say you can afford $3500/mo but  you know that you like to have money for eating out a lot, concerts, travel, whatever, then be smart.  Don't buy so much house/duplex that you can't have a life and continue to save money.

As far as the LLC, that is a judgement call.  It's great to have the business protection, but depending on what state you're in and how much it costs, you may want to see if real estate investing is really for you first.  A lot of people spend a ton of time and money setting up LLC's and other entities only to do 1 or no deals because they just can't get past the fear or they find out it's not what they enjoy.  Look into what it takes in your state.  If it's fairly simple and inexpensive then I would do it, when you get ready to close.  If it's expensive and has a high annual fee, then talk to some professionals (CPA, Attorneys).

Best of luck!

Cortney

Joe Funari · Answer

@Trevor Turner That is great to hear. When you get settled let me know and i will send over the CPA i mentioned, as well as, a couple of good REI club meetings to attend near you.

Chris Quinn · Answer

@Trevor Turner It's great to hear you and your wife are going to take the plunge into REI. Many of the above comments are correct. Beyond continuing your REI education (podcasts, BP, books, etc) there are 3 main areas of focus: Lending, Entity structure, and the Real Estate itself. I highly suggest finding someone in each area to assist. A great lender can save you money time and hassle before getting to the closing table. He can also provide suggestions of how to repair any credit issues to try and bump those scores to the next tier. An investor-friendly realtor learns their clients formulas and strategies and can save time weeding through properties that don't meet their investing formula of choice. An investor friendly agent is not afraid to put in multiple offers until their clients gets a good deal, provide advice when requested, as well as provide clients with up to the minute deals. Then of course your tax/accounting guy can save you thousands.

Joe Funari · Answer

@Trevor Turner Setting up an LLC in Texas is pretty easy. Find yourself a good CPA that specializes in real estate. This CPA should know how to do cost allocation studies too if they are true "real estate" accounting gurus. Critical for long term buy-and-hold strategy. They typically charge $1000 to set it up for you. The tax savings from having an LLC are huge. Its not a difficult to begin treating your REI career as a business. This is a good first step, in my opinion. My broker, an Aggie alumnus, may know some other investor friendly realtors down there in College Station. I will check with him and let you know.

Nishi Lagoo · Answer

Hello Trevor, It's good to find another Aggie here.

I am a newbie too, so I may not be able to give you any expert advise but I can suggest few things I did :

1. Listen to Bigger Pockets Podcasts. It widened my perspective about real estate investing and also motivates me.

2. I checkout craigslist for listings. Even though I did not find any listings I found 1 wholesaler contact info who added me to his email list and a realtor who is working with other investors. (FYI I am investing in Houston).

3. You can also checkout Networth Realty. I haven't done any business with them yet, but I had a good first impression. They help you find deals, loans, appraisals and rentals.

4. Last but most important- keep educating yourself.

Hope this helps and good luck!

Tyler Mullen · Answer

@Trevor Turner

Welcome to BP and congrats on graduation!

I would recommend, for you and all those starting down the road of personal finance, to first take serious stock of your KSA's and then focus on your strengths.  Personal finance, Real Estate Investing, these are vast worlds with many viable routes leading to financial freedom and many pitfalls to avoid.  Your biggest asset will be your mind, it's all about critical thinking.

What are your specific goals?

What are the tools you have (your strengths) in hand to make that happen?  How can you leverage this?

What new information and tools can you acquire quickly and cheaply that make your goal easier to attain?

There are many great reads out there you might find beneficial, not all are strictly REI related.

You could listen to all the BP podcasts to gather more information.

There are local REI meetups where you could network with other like minded people, that would probably be a good investment of your time.

While you're in the information gathering mode and getting as specific as possible with your goals and strengths, save as much as you can.  Everything about PF/REI and financial freedom is made more straight forward when you have your own capital to invest.

Cheers, Good Luck!

Redgy Saint-Germain · Answer

@Trevor Turner You definitely don't need an LLC now,  you need a broker, he/she may introduce you to a lender to get a pre-approval. I would say get your affairs in order first ( pay stubs for the last 24 months, w2, bank statements etc).

Once you have a pre-approval you will know what price range to shop for with your realtor. I would also ask your broker if he/she can introduce you to a lawyer. Also try to aim for a duplex to enjoy the benefits of househacking.

Good luck

Redgy

Jasmine Benford · Answer

Anytime, I would listen to the podcasts too. Great information! I found an investor friendly realtor on BP and just started chatting with them. You can start a new thread and ask for recommendations in your area, a lot of the members are eager to help which is why I love BP!

How to buy my first property by January

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