6 Foolproof Steps to Obtaining Your First Investment Property

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The allure of real estate investing is easy to grasp: it offers residual income, price appreciation, and the safety of owning a hard asset. I grew up living in a rental home and remember thinking how lucky my landlord was to get money every month without having to do anything! In an effort to replicate his residual income model, I would rent my toys out to my younger brothers.

I was appalled, at the age of six, when my mother told me that I had to share instead of lend out my toys.

I learned the hard way growing up that owning assets — and real estate in particular — can be very difficult. The problem is that it is very capital intensive, particularly for those who don’t already have assets. Tightening lending standards, which are arguably a good thing for the safety of the greater economy, further prevent normal people from acquiring rental property. Down payments can be as high as 40% for income property, which is a ton of money for 99% of Americans.

FHA is a great option, but may require that you live in the home, which puts you in an ethical tight spot if you want to rent it out. There is also a dearth of property available in many of the desirable markets around the country. I used to feel that the very idea of owning rental property was a sham — only rich people were able to afford it!

The reality is that buying a good rental property is difficult, but it is also possible. Five years ago I graduated college, only to quit my private equity job in favor of a gig buying foreclosures for a company that paid me $3,000 a month. I was able to buy six rental homes in 18 months, which has since spring-boarded me onto larger and more profitable deals.

I can only really speak from experience, but I’m confident that anyone who is persistent enough can buy property using the steps below.

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6 Foolproof Steps to Acquiring Investment Property

Step 1: Learn About Real Estate

In a lot of ways, this is the hardest part.

You — yes, you — need to learn a ton about how real estate actually works. I read books like Real Estate Finance & Investments: Risks and Opportunities by Peter Linneman. The first time I read the book, I probably only understood about 25% of what was in there, but I kept working through it, and eventually I understood most of it. If I didn’t know a term, then I would look it up on Investopedia or some other site. You can figure out anything with Google.

I would also talk about real estate to anyone I could. I was fortunate in that I was 22 years old, and people were eager to “impart knowledge” on me; it was socially acceptable for me to be ignorant. I looked very stupid for a while, but I was fine with it. In one of my first conversations, I asked a good family friend to explain what a “cap rate” was, a term that any basic real estate person should know. I was a little embarrassed that I didn’t know the term, but I was glad that I wouldn’t make the same mistake again. (Look up “cap rate” right now if you don’t know what it is… like, now! Go!)

The most important part of conversations is to ask questions. This is not a time to regurgitate every page of the real estate textbook you just read. This is a time to learn how someone else made their money. The beautiful thing about real estate is that there are a ton of ways to make a buck (investing, brokering, research, tech, appraisals, renovations, etc.). There is a reason that real estate is a huge driver for the US and global economy — it touches every aspect of life.

Take a pay cut to learn. It may be by shadowing a friend, spending your weekends doing an open house for someone or taking an internship that doesn’t begin to pay off your student debt. It is really hard for someone to say no to an offer to work for free. I should know — I offered myself to just about every real estate person I knew after college.

Related: Real Estate Investing: The Free Ultimate Beginner’s Guide

It is humbling, but it is worth it.

The last point to be made in this step is to really learn about real estate. I’m a huge fan of practical knowhow. If you know someone who is exactly where you want to be, then go and ask them exactly how they got there. It may be different for you, but you might as well get their story and learn what worked for them.

Step 2: Commit to Owning Real Estate

This is a crucial aspect of the process. I didn’t come from any family money, and it took me years to be able to buy properties, but I knew that I was going to do it. No matter what it took, I was committed.

It is becoming increasingly difficult for people to buy investment property for the first time. In many ways real estate is a game of rejection. I look at about 100 flip deals for every one that I buy. That is a clean 1% success rate. I had over 74 meetings before I convinced someone to hire me for a real estate job that I thought was helpful to my goals. I don’t look at percentages; I look at whether I got the task done or not.

Related: When Will You Be Ready to Buy Your First Rental Property?

Embrace the struggle, and use it as motivation. If you are committed, then you will get it done — period.

Step 3: Develop a Strategy

I’m going to give you a strategy that I think is attainable for most people: Buy a single-family house with an investor, and rent it out for income and price appreciation. Focus on this strategy and this one alone. Don’t try and do flips, don’t try and buy apartments, don’t try and reinvent the wheel — just find an investor, and buy one single-family home…to start.

This step could also be called “focus.” You need to focus on achievable goals, and this is it. Trust me. Flips have a small margin for error, apartments require a ton of capital, and reinventing wheels is a fool’s game.

Your strategy is to buy a property that will cash flow positively. This means that at the end of the year, your outlay must be less than the property brings back to you.

First, you must find a property:

  • Go to Redfin or Zillow or some other listing site and look at what is on the market in an area that is less than two hours’ drive away.
  • Click around until you find a house that may be a good fit.
  • Once you find a house you think may work, you should then locate the agent’s phone number and other contact info. Redfin and Zillow will usually have the listing agent’s name. A quick Google search should produce their contact info — agents want to be found.
  • Call the agent. Yes, on the phone. No, don’t email them unless they don’t answer your call. Human interaction is important in real estate because most people don’t do it.

Tell the agent you are interested in the property and that you would consider having them represent you. There is some ethical dilemma for agents who double-end deals (represent both the buyer and seller), but in my experience it is an effective way to get a leg up on a deal.

  • View the property in person.
  • Do this process until you find a deal that you like.
  • Once you find a deal you like, make an offer. For our purposes, let’s say it ends up being $100,000.

Second, and once in contract, you must underwrite the deal:

  • Go to PadMapper, and look up the property in question. PadMapper is a site that aggregates rental listings on a map from CraigsList. It’s a convenient way to figure out how much your property will rent for.

Also, ask the agent you are working with how much they think the property will rent for. For our purposes, let’s just say it ends up being $1,000 per month.

  • Figure out how much taxes are. Usually, it is a function of the purchase price, but it depends on the state, county and city. I would start out by calling the county assessor’s office.

Is it annoying waiting on hold? Yes, for sure. Do it anyway; you need to know exactly how much the taxes will be. Let’s say it ends up being 1.5% of the purchase price.

  • Get an insurance quote. Call up any of the 6,000 insurance agents in your city (State Farm, Farmers, etc.), and ask for a quote. Say that you are an investor looking to buy a lot of real estate and that you want their best quote. Let’s say it ends up being $1,000 per year.
  • Call a contractor, and have them give you a bid to fix up the property to a level where you can rent it. I won’t go into extreme detail on this part of it, but my general recommendation is to make sure things are clean and working — they don’t have to be new and swank. Let’s say it ends up being $10,000 total.
  • You need to estimate maintenance. You should be conservative, and for that I will say to estimate $200 per month.
  • Let’s also assume that you will be managing this property yourself, at least to start. This will save you some bucks and also get you some great experience.
  • Lastly, let’s assume that you will have one month of vacancy, which would amount to $1,000.
  • Enter all of this information into a spreadsheet like below:
Purchase Price  $    100,000
Initial Renovation  $    10,000
All-In Cost:  $    110,000
Monthly Rent  $    1,000
Annual Rent  $    12,000
Annual Taxes  $   1,500
Annual Insurance  $   1,000
Annual Maintenance  $   2,400
Annual Vacancy (One Month)  $   1,000
Total Expenses:  $   5,900
Net Operating Income  $   6,100

 

Note: “All-In Cost” was calculated by adding “Purchase Price” and “Initial Renovation” cells. “Net Operating Income” cell, also known as “NOI,” was calculated by subtracting “Annual Rent” cell by “Total Expenses” cell.

  • The next step is to talk to a lender and figure out how much you can borrow, and how much that will cost you. Let’s assume that you find a good lender who gives you a loan for 60% of your all-in cost, with a fully amortizing 30-year term at 4% fixed rate. (Please remember to look up the terms you don’t know.)

In this scenario your loan would be about $314 per month, or $3,768 annually. I got this by using the payment function in Excel or by typing “=PMT(” into an Excel cell.

  • With these numbers your return would be $2,332 per year. This satisfies the requirement that the property will cash flow positively.

Note: The reality is that you could have some major property damage at any time. For example, the roof could fall in, and you might need $10,000 to replace it. This is why you should have an investor — and also keep reserves.

  • All you need now is to find someone to give you the 40% down ($44,000) that the lender is requiring!

Step 4: Find an Investor

I got lucky with this step. I was, however, also very prepared to lock down my first investor because I had done steps one through three. Here is my advice for finding an investor when you have no marketable experience: Always talk about your goal to buy real estate.

It may seem simple or arrogant or taboo, but it has worked really well for me.

I always talk about my goals in real estate when people ask what I am up to. I found my first investor for a single-family home at a bar after a high school basketball game. It’s a numbers game, and you just never know when you will talk about investing in front of the right person. This is also why it is so important to be educated, committed and to have a strategy. You need to sound smart when you talk about real estate and have a plan that people can see works.

Investors have a language that they like to speak. It includes terms like “ROI,” “Cash on Cash,” “Principal,” “Debt Service” and all other kinds of mumbo-jumbo. Learn the language, and then speak it, and you won’t have a problem finding an investor.

I’m also a big believer that good deals find money. This is why I’m suggesting that you get a deal under contract prior to finding an investor and not vice versa. The steps could probably be switched, but this is how I went about it.

Related: The First Step in Buying A Rental Property

At some point any investor is going to want to know how much money they are going to make. I personally think that talking in terms of cap rates are the best way to go. Some investors will want to know what their cash on cash is or what the IRR is, but I would always suggest proffering up the cap rate first.

A cap rate is calculated by dividing the NOI by the All-In Price. In our example it would be ($6,100/$110,000), which is equal to about 5.5%. Be conservative. Investors will want to know how much vacancy, maintenance and other expenses you are allotting. If they think you are over-selling a deal, they will be turned off. Under-promise and over-deliver — it makes your life way easier and also helps you build a longterm relationship with the investor.

Step 5: Purchase the Property, and Get it Leased

You will need to create an entity with your investor, set up a bank account and likely file LLC docs in whatever state you are in. I actually like to set up my LLCs in Utah because it is cheap, and the state government is really helpful and friendly. In reality, any state will do.

At this point you will start renovations with the contractor. Ideally, you will have already had a renovation agreement in place prior to closing. This will take away the uncertainty of the fix up cost.

Having managed about 500 renovations in the past 5 years (never swinging a hammer once, for my own safety mostly), I know that something will go wrong with the renovation. Don’t worry about it; just work through the details with your contractor and investor.

It may cost more than you initially thought, but the reality is that the margin for error in a rental home is pretty high compared to a flip. This is why I recommend doing a rental first.

I start marketing a property for rent as soon as I buy it. There are differing views on this — some people will wait until the property is completely renovated. It really just depends on what market you are in and what your preference is. I like to use CraigsList for rental listings. It is free and has helped me rent a lot of homes. There are other sites out there that shouldn’t cost you a lot, if anything, to list on. The key is to write a nice quick description and have a reasonable asking rental rate.

Final Step: Stay Persistent, and Always Keep Pushing

This is a simplified step-by-step process. There is a lot of intricacy that I simply can’t sufficiently cover in this piece. You will have difficulties, bad tenants, renovation problems and all kinds of other issues. Don’t freak out; work towards a solution, and never quit.

As long as you stay persistent, you will be successful.

Owning real estate for the first time can seem a daunting and insurmountable task. I know the feeling all too well. I used to watch the shows on television where people would flip a house in a few weeks and make some enormous sum.

Who wouldn’t want to do that?

The reality is that real estate can be a risky business for someone who is just starting out. Buying a single-family home and then renting it out is the safest way, in my opinion, to get experience and also make money. You won’t become rich in a week: this is a gradual process. You want to become wealthy, and that takes time.

The key to building this kind of longterm wealth is having compound interest work for you, not against you. Buying rental property is the most attainable way to do this.

Will you implement this 6-step process? What would you add to my list? How does your method of obtaining property differ from mine?

I’d love to hear your best tips and tales — please comment below!

About Author

Conor Flaherty

Conor has experienced every aspect of the foreclosure and rental business for single-family homes. He was VP of Acquisitions at Silver Bay Realty Trust, and has flipped over 100 homes. Conor started a blog called Wall Street Slum Lord and is working on publishing his first novel.

55 Comments

  1. Great article Conor! Your points are very good advice for the investor still sitting on the fence. I cannot agree enough with the value of education in this business….read, read, and read more!!!!

    Brian

      • In the scenario you walked us through, what $$$/% amount would you make out of the profits vs your investor? And other than just negotiating the terms in regards to slicing the profit pie, what would you consider to be the standard breakdowns in scenarios such as this. Thanks for the information it’s been quite helpful.

  2. amazing article!!!! I have been reading and researching for ever and this is one of the best articles that I have read.

    I will be reading your future articles.

    I just have one question, you mention in your article ‘to find the sfh on redfin or zillow’. I am getting a ton of emails with property listings from wholesalers. Clearly I would be paying retail for the property I find on redfin/zillow. Are you recommending to pay retail rather that wholesale? If so, can I ask why?

    • Conor Flaherty

      Thanks for the kind words, Lisa!

      You have obviously done your homework and created good relationships with wholesalers. If you can buy a deal wholesale then you definitely should. I was more recommending Zillow and Redfin for people who haven’t already built up connections and don’t know where to start.

      Also, feel free to forward those wholesale listings on to me… 😉

    • Conor Flaherty

      Jeff – This is a very important (and great) question. I was actually going to write a post on it next week!

      My mindset to start was that I was going to try and get the biggest equity portion for myself as possible. I started buying in 2010 and it was pretty clear home prices were going to go up… eventually. I gave my investors a 7% pref payout (on their cash investment) and then we split anything above that 50/50. We also split any upside appreciation 50/50. This is an all-world great deal.

      In my apartment deals now I structure them with the 7% pref still to the investor, then I take the next 2%. Anything above that is 80% to the capital/investor and 20% to me. These are much larger deals that are also leveraged 75% so it makes sense for me.

      A saying that was told to me was, “Cash flow is cents, and appreciation is dollars.” In other words, if you are just getting started you should be looking for appreciation.

      Thanks for the comment!

  3. Justin Jacques on

    Hi Conor,
    Excellent article, very motivating for a newbie. By partnering with an investor are you suggesting that a 50-50% split of profits/equity/appreciation/expenses etc…? The investor brings that cash, and you bring the deal. As a newbie, would you suggest targeting this type of spread for a partnership?

    Best,
    -Justin

    • Conor Flaherty

      Justin – great question!

      I think for your first deal it is important not to be greedy. The way I approached it was to say to my investor, “I won’t make much money unless the project does well, and you make a ton of money too.” I made a little bit as cash flow and for management, but where I really got lucky was in appreciation split, which as you suggest, was 50/50. This was a really good deal for me, and most investors won’t go for that kind of split. If you can get something like 80/20 then I would still go for it.

      The key is to get a deal under your belt. Once you do that (and perform well) then you start to get a track record that you can show to other people. The better the track record, the better the terms are for you.

      Do you have investors in mind already?

      Thanks for the comment!

      • Justin Jacques on

        Conor-you’re awesome at responding back quickly!

        I agree with you. Getting a deal under my belt is well worth an 80/20 split or the like. I don’t currently have an investor in mind, I didn’t really consider this option until reading this post. I’ve come across a few deals in the past year, however I didn’t have the cash nor the experience to make them happen -I’m really glad that I read your post, and I’m quite dumbfounded that I didn’t consider this option.

        I’ve spent a great deal of time learning, and I’m definitely committed to making a deal happen. Now on to the strategy: I’ll find an investor, and partner with them on the next deal that I come across. This post is one of the best that I’ve seen in terms of laying out the foundation “flowchart-style” strategy for partnering on a deal, so thanks again for this!.

        -Justin

        • Conor Flaherty

          You are on the right track, for sure! I look forward to hearing about your progress!

          I really appreciate the kind words! It’s always fun to share real estate/investing experience!

  4. I must be missing something here… You find an investor to provide you with the 40% down, correct? The annual cash flow on the property is $2332. Just paying back the investor his $44k is going to take almost 19 years giving him the entire cash flow on the property. Personally, I don’t think this is a good deal for an investor much less the individual buying the property.
    What am I missing here?

    • Conor Flaherty

      Scott – Great point – I was just trying to use some round numbers to make the math easy.

      I will make the point that a 5% cash on cash (which this deal is) can be a great deal, in the right market. It depends on if you are looking for cash flow or appreciation or some combination. If this was a property in San Francisco, then a 5% cash flow (presumably all going to investor) where you got 50% of the upside would be sweet, right?

      Where are you looking at deals? What type of returns do you target?

      • I’m still new and hunting for my first deal. Maybe I’m still misunderstanding something or just don’t have the right mindset, but if I had $50k laying around to invest and someone brought me a deal similar to this I can’t imagine being interested in it. One of the veritable rules that Josh and Brandon are always harping on is to never count on appreciation unless you have a very specific reason for doing so like a major new employer going in across the street or something similar.
        I’ve been analyzing a lot of potential deals, and nothing has come together as of yet, but most of the deals that look good and research I’ve done points to 12-15% cash on cash as being a lower end of the spectrum. Now I understand that you are using more simple numbers here and this probably makes a LOT more sense if the bank required down were only 25% or better yet a Homepath property and the down requirement were only 10%. Yes, the mortgage would be greater, but this is amortized over 30 years whereas you can provide your investor a better cash on cash.

        • Conor Flaherty

          If an investor has $50k laying around then they usually have quite a bit more in the bank. Depending on their wealth it is very possible they are investing in low-yield, but very safe, government bonds. The 10 year treasury is at 2.5% or something like that, so hypothetically if you can be double that (remember, no Fed Tax on Treasuries) then that should be a decent deal for them because there is also upside potential in real estate.

          I’m a big fan of looking at the downside. In a deal with an investor where you are putting down 40% and already cash flowing the property you are pretty safe, in my opinion. Even if you don’t make much in the first deal, you are still building your experience and track record without any dollar risk to yourself.

          12%-15% is a good return. I would imagine that you could find investors interested in something like that. That’s usually around the yield I target for my apartment deals. If you could put down 10%, then by all means. I have just found that lenders are hesitant to lend with that kind of leverage on investment property.

          Are you making offers on the deals you are analyzing? If so, are you using an agent?

        • Unfortunately, we haven’t been able to make any offers on the deals we have analyzed up to this point for a variety of reasons. One deal went under contract the day we found it. Another had some very strange feedback from the listing agent about absolutely no negotiating even if issues were discovered during the inspection period. Another was a quad that was a bit too much for us and I received some caution against starting out with a quad as a first investment in my area. There have been other deals that the numbers didn’t make sense on. A couple of other deals the seller apparently wasn’t that motivated because they stopped the dialog.
          We are eager to make some offers but just haven’t made it quite that far along the process yet.

  5. Thanks so much for the article. As a new investor I find myself with continuous energy that seems misguided at best.
    You break it down in a way that is easy to understand yet gives confidence to all. After reading this, I feel as though what you write about is very possible and attainable. Thank You!

    Tyrone

  6. Conor,

    First this was a great post! One that can really help someone, has some real meat to it.

    That said, I won’t consider a long term rental that doesn’t show an 8% return on cash invested. Like other conservative guys, I don’t count appreciation….consider that a bonus.

    But … to the new guys looking for really low money out of pocket, you probably need to sacrifice that some. And somehow maintain a reserve for repairs. At least in my market, a medium to good one, that’s going to require some effort!

  7. Ben Berkovitz on

    Great article Conor! I am only 17, somehow this shocks people (because I am already going into real estate investing). What do you think is the best way for me to start and gain the most experience? Latch onto someone else and take as much as I can from them?

    • Conor Flaherty

      Ben – The only thing that would shock me is if you DON’T become very successful! Congrats on getting started early – you’re smarter than me!

      I would look around the people you know who are in real estate and offer to help them for free. At such a young age it might be helpful to intern at a real estate private equity firm to get the financial background. This is particularly helpful when talking to investors because you will have a big name on your resume and also be able to speak the language. You should also learn excel and how to create a financial model. I would go to a local RE PE firm and just ask if you can intern for 4 hours per week to start. Make sure to ask lots of questions.

      I would also try and learn about the nuts and bolts. I’m sure you know someone, or your parents do, who is a real estate agent. I would offer to help them for a couple of hours on a weekend. It may also help you earn some cash.

      Glad to talk about this further if you want to shoot me a message to my profile.

      In short, I would be surprised if we all aren’t working for you someday!

  8. Pyrrha Rivers on

    Conor,
    Thank you for the great post. I purchased my first property in August, the rehab is complete and I am now advertising it.
    I used your article as a great checklist as I want to systematize my processes as much as possible. I love actionable steps and small attainable tasks that lead to a goal. I think your article does a great job of that. I did not use an investor as you suggest but because I am abroad, want to approach my friend who ended up being a great project manager to partner with me in the next project. However, I will be the capital investor and he will be the hands on person.
    Can you give some guidance on how to structure that proposal?
    Thanks again for a great contribution to the knowledge sharing of this site.

    Pyrrha

    • Conor Flaherty

      Pyrrha – Congrats! Sounds like you are well on your way!

      It is an interesting question. I think it is very important to recognize and compensate good people – they will more than make up for it. Sounds like your project manager is an all-star, which is great. It also probably means that they are somewhat ambitious and will figure out their worth sooner or later. I would make sure to align your interests. In other words, I would give them a small piece of the deal if it does well on top of what they make for the project management.

      What exactly does this person do? Are they going to continue to manage the property? I also like to look at it from their perspective – what would make it worth it to them to continue working with you? Ask them how many hours they spend on a project and then try to figure out how much someone like them should get per hour. I would give them a fair hourly wage and then align interests by giving them a small piece of the deal. It’s tough to say what those numbers are but maybe $15 per hour plus 5%-10% of the upside? If you are only doing a couple deals I would be less generous than if your goal is to buy 10 or more.

      Hope this helps, and thank you very much for your comment!

  9. Hi Conor,

    Thanks for this great article! As a beginner, I really learned a lot by reading a step-by-step, ultra-straightforward guide like this one.

    I do have a question though: You’re recommending new investors to focus on single-family homes. I suppose that there must be something about condos which make them not desirable as the first investment property. But from Redfin/Zillow, I gather that they sell for much cheaper than single-family homes. So what’s so bad about them that you recommend newbies (like me) against buying them?

    Again, thanks for taking the time to write this great article. Please keep up the good work!

    Hieu

    • Conor Flaherty

      Hi Hieu – Nothing is wrong with condos. I consider them basically the same thing as single-family homes. I thinking looking at condos is a great idea – just make sure to know what the Home Owner Association (HOA) dues are and factor that into your underwriting. Sometimes they can be a bit steep…

      Thank you so much for the comment!

  10. Gloria Dulan-Wilson

    Thanks for the great article – I got a great deal out of it – the only thing that I differ with you on is the purchasing of a single family property for rent. It does not serve my purpose since I’m looking to be an owner occupant with rental income. Do you have any additional salient advice for that methodology?

    • Conor Flaherty

      Good question, Gloria!

      I actually just helped a friend buy a duplex in Oakland. I think the biggest thing is to make sure the numbers work rental wise. For example, let’s say you have to move out and rent your unit – would the deal still make sense? If so, then I say go for it.

      I know a lot of people who got their start doing what you are talking about!

  11. Great article. As a newbie myself, I cannot stress the importance of keeping yourself educated so that you can have an intellgent conversation with others about being an investor. Stay humble and keep your ears open!

    Tyrone

  12. Thank you for the great article! It has really sparked my interest in investing. I’ve always wanted to get into this but I was too scared and lacked direction. I will definitely start reading and learning more as you suggested. A couple of quick questions though- what part does my personal credit history play in all of this? Also, what suggestions do you have in forming an LLC- does it matter what state I do it in versus where I’ll be buying property?
    Thanks again!

  13. Curt Smith

    I don’t know what part of the country is your Farm area, but here in the major counties of Atlanta, you will NOT find any good deals in the MLS. I was floored when I read you suggesting to search in zillow/trulia!!!

    What I would recommend in replacement of searching on MLS, paying the ask or more likely 10% to 20% OVER the ask, resulting in rentals in the cap range of a paltry 6%. Better off buying bonds! No toilets etc.

    Find what’s hot in your area. Then look for the OPPOSITE. Do not follow the crowd. Here in GA the Funds are buying 3/2’s, 4/2.5’s newer than 1990, that means you look for 3/1’s older than 1990 in zips where Funds don’;t buy. Yes I said 3/1, 3/1.5, 900sq ft, to 1200sqft red brick ranch with carport. These are the market’s ugly ducklings. Yet get almost the rent as a bigger 3/2 and are MUCH cheaper to rehab. I hate 2000 sqft behmoths. That’s alot of paint and carpet.

    Look in small towns up major freeways. Look outside the hot counties.

    How to look? FSBO ads in craigslist, direct mail to expireds or vacant’s (Kent Clothiers findmotivatedsellers.now lead service). Search craigslist for these key words: motivated, must sell, cash offer, etc. There are deals in craigslist. But the best deals are from direct marketing to sellers who don’t yet know they are sellers. Once they call an agent, it’s too late to get a good deal.

  14. don alberts

    Conor, excellent and concise. I needed to hear to focus on one sfh. I have been bombarding myself with everything, to become the successful investor that I will be. But I must start with the first purchase. Thanks for you insight. Have a Great Day. Don

  15. Perry Notarnicola

    very good article and loved all the comments I am a newbie as well doing research and trying to figure out which route I want to take dealing with real estate. for me a sfh is not an option because I am looking to get a house in long island new York which you pretty much need at the very least a duplex. there is a lot of other expenses that will go into the house which a lot of people don’t realize and that could take you from cash flow positive to loosing money each month. also for the appreciation I would always only consider that icing on the cake

  16. I am often asked how to invest in real estate and I typically throw out the standard Location, Location, Location without further details. Now I will just refer inquiries to this article. It’s a nice quick summary of how to by investment properties. Great job. My only advice is to identify potential investors first before tying up a property. It can take months or evern years to get good investors.

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