All Forum Posts by: Steve Kenney

I should have clarified - by "pulling out equity" I was referring to doing a cash out refinance on one of the existing properties. Your lender can give you more details on the specifics of doing this in your situation. You typically can't use a HELOC on an investment property.

Hi Abram,

The three things I'd recommend doing for anyone just starting out are:

1. Start listening to podcasts and listening to books about real estate investing. BiggerPockets is obviously a great podcast to start. 

2. Attend local real estate investor meetups in your market to build your network and find a mentor. 

3. Find an investor focused real estate agent in your market! This one is really important. The right agent will be able to help you navigate the purchase process and analyze deals. 

Those are the three biggest things I'd recommend doing when first starting out. That's what I did and they greatly helped me and gave me the confidence to get my first deal. As far as action steps to get your first deal should do the following:

1. Get pre-qualified with a lender (talk to several lenders in your market to get the best rate)

2. Define your "buy box" or criteria for your first property (this may change a bit as your start analyzing deals and looking at properties, but it's important to know what you want). 

3. Meet with an investor focused agent, they will set you up with an email list of properties in your area that meet your criteria. 

4. Start analyzing deals. Set a goal to analyze two properties a day. 

5. When you find a deal that meets your buy criteria setup a showing to view the property.

6. Once you've viewed some properties and find one you like, make an offer. It's important to get some offers out there, if you don't make any offers you'll never get a deal!

7. Once your offer is accepted, you'll move forward with the bank appraisal, building inspection, and then you'll close on your first deal!

It may sound like a lot, but the right agent will be able to guide you through this process. Good luck and let me know if you have any questions!

I have my properties in an LLC, but keep in mind when purchasing a property in an LLC you cannot use conventional financing, as Alecia said. So if you wanted to purchase a rental property using an FHA or VA loan, you'd need to put that in your name. If you want a bank loan for a property that will be in an LLC, it will be a commercial loan.

Hey Tony,

Welcome to the community! One thing that I did a lot of when I first started out was analyzing deals. I would analyze deals as often as I could. Since you have a Pro membership you have access to the calculators, so the Rental Property calculator works great for that. There is a video on how to use the calculator, but if you have any questions when analyzing a deal let me know!

Hi Qais,

As others have said, the pro membership gives you access to the calculators (Rental Property, BRRRR, Fix and Flip, etc.). For a long time I was analyzing deals using a spreadsheet and the calculators here are much easier to use and will generate a nice report of the deal. So if sharing your analysis with someone, you can send that report.

I've found that just the calculators are worth the pro membership.

Hi Reagan,

I would contact all tenants and remind them that there is a strict no smoking policy in your building, which is enforceable by the lease. When I bought my first building I had hard-wired smoke detectors put in throughout and they had wired them so each unit's smoke detectors were connected to the others (I eventually talked to the fire department and confirmed I could change this). There was one tenant that was continually smoking in the unit and setting off the detectors for the entire building, which was really frustrating for everyone. I spoke with each tenant and they all insisted they weren't smoking in their units. 

One day when I was in one of the units I found an ash tray in the living room with a bunch of cigarette butts, so it was obviously him. I confronted him, reminded him there was a strict no smoking policy and if it happened again he would be asked to leave. The problem stopped after that.

Sometimes it can be difficult to prove if someone is smoking in their unit, but if there is a smell of smoke in the building they most likely are smoking within it. The next time you are in there be on the lookout for any signs of them smoking. 

Hopefully a stern reminder of the no smoking policy will resolve the issue.

Glad to hear it! Getting comfortable analyzing deals is important and it's free. Once you get into a routine it takes only a couple minutes. Try to set a goal for yourself to analyze one deal a day. Once you do that often you'll feel more confident making an offer when a good deal does come up. When I started it was pretty scary for me at first and it took me a year before I found my first deal. Looking back, I had passed up on several solid deals because I just didn't feel confident enough. Finding a mentor that knows your local market helps a ton, so that's another reason why meetups are important. Just remember you'll likely have to get out of your comfort zone for your first deal, but if you put in the work it will be worth it!

Hey Zack,

I'm up in Maine so I'm not too familiar with the Long Island market, but there are a lot of advantages to investing locally, so my advice would be to buy local and house hack your first deal. When house hacking, you get much better financing terms (less money down) compared to if you weren't living in the property. Also, I know most people start out wanting to buy a duplex, but don't shy away from the three and four unit buildings if you find one that you like. More units typically equal more cashflow. You can get up to four units with an FHA loan.

My advice for getting started out would be to:

1. Go to a local meetup to network and talk other investors

2. Talk to a few lenders at local banks/credit unions and get pre-qualified

3. Find an investor focused real estate agent in your market. They'll get you setup with an email list and should be able to help you analyze deals.

4. Analyze deals every day so you get comfortable with running numbers. When you see a deal that matches your buy criteria, setup a showing. 

5. Make offers on properties - this one sounds obvious but is important. If you are analyzing deals but not making any offers you won't ever get a property! 

What are you next steps to move closer toward your goals?

Finding a good property management company can be hard, so if you are working with one now that is doing a good job, I would continue investing in that market and working with them. If I were in your shoes I'd continue adding cashflowing properties to my portfolio while having a property management company manage them so you can focus on your restaurant business. 

On your next deal you could consider buying a larger building with more units (IE 4-8), as those typically cashflow much better than a single family or duplex. 

Hey Ashley, in this situation I would just politely respond to let them know you've chosen a more qualified applicant and leave it at that. 

Also, I find screening tenants pretty time consuming and it is a task I will eventually hire out. Most property management companies will offer to place tenants for you for half of the first month's rent, so going forward if you decide you don't want to do this yourself that is one task you can hire out.

If you want to know more, this is a great article that explains how to decline an application and has a sample rejection letter:

https://www.apartments.com/rental-manager/resources/screenin...