The 3 Most Important Things to Consider Before Buying Your First Property

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In the past four years as a property investor and business owner, I have learned so much — some of which I wish someone would have told me as I began my journey because it would have saved me time and money. I would have been able to better focus on the deals that best fit me and my goals, rather than just investing based on speculation.

This week I will share with you the three most important things every investor needs to consider before buying their first property. These may seem simple and basic, but if you have read any of my previous blogs, simple is definitely my style. I know that if it stays basic, I can duplicate it and teach it without losing clarity with all the confusing details.

So, here goes!

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The 3 Most Important Things to Consider Before Buying Your First Property

1. Am I Connected With the Correct People?

Whether you’re investing in your backyard or in a differing state/country, you need the same thing: trustworthy people. Whether it be a maintenance guy, property manager, realtor or a contractor, your investment and your interests should be first priority.

Related: 3 Real Estate Investing Lessons I Wish I Had Learned Earlier

If you feel you’re being pushed into purchasing a property or a service, you have found the wrong people. The right people will guide you and have no problem developing the relationship over time. I mention this in the Bigger Pockets Podcast and various other media interviews.

2. Do I Know the End Goal for My Future Investment?

My last three BiggerPockets blog posts were all about developing your goals, managing them to accomplishment and sharing your vision with others to magnify your impact. In the investment world, you need to completely know and understand your goal, even if you don’t know how to achieve it. That’s what people like me are here for. Also, see #1.
But really, knowing what you want to accomplish in real estate to meet the demands for your lifestyle moving forward is very important. No one wants to lose money or find out 20 years from now that they fell short of where they needed to be. Time can be wasted and spent, but never returned.

3. Have I Considered a Solid Exit Strategy?

Life happens everyday. Investments are made in order to allow us freedom in our future, as well as to recover from unexpected events in our present. If investing in real estate, you have an option if the latter occurs — liquidate the asset. If investing in solid B class areas and entering the market at a below retail price point,, as we do here in Ohio, your exit will be fast and painless.

Other investors may want to buy you out or you will be able to list and sell on the open market. In many instances, your tenant may want to become the owner, which is always a good feeling to give someone a hand up. Just always keep the question in mind: if something unexpected happened, how quickly could you get out of the investment?

Conclusion

As I mentioned above, if I had known these three things several years ago, I would have saved a lot of time and money. Building trust and spending enough time establishing the right relationships can propel your investment in a positive direction. Developing your goals and talking with your loved ones about your family’s financial future is critical to your future success. Investing in sustainable markets that have sound B class areas and properties provide for a sound exit if needed.

Related: 12 Real Estate Investing Lessons Every Investor Should Know

What I teach and now practice was learned from experience. Over 400 deals in various capacities throughout my investing career provide me this insight. As I said, it is simple, but if you ask the right questions and follow the correct path, you will be successful.

In your future do you see the ability to be financially free? Do see yourself being able to retire at a comfortable age, still enjoying a lifestyle of your choosing?

Take some time over the next week to reflect on these topics, and start thinking about what the New Year brings. Your new future may surprise you.

Life is a series of experiences, each one of which makes us bigger, even though it is hard to realize this. For the world was built to develop character, and we must learn that the setbacks and grieves which we endure help us in our marching onward.” — Henry Ford

Readers, weigh in! What would you add to this list? What do you wish you knew when you were starting out in real estate?

Don’t forget to leave a comment below!

About Author

Engelo Rumora

Engelo Rumora “The Real Estate Dingo" is a successful property investor, motivational speaker and serial entrepreneur that quit school at the age of 14 and played professional soccer at 18. He is also a soon to be published author along with becoming a TV personality in his very own real estate house flipping show. To find out more go to engelorumora.com . Engelo Rumora has been involved in over 400 real estate deals and founded five businesses in Ohio. The most successful is Ohio Cashflow, a company that specializes in providing turnkey properties in several Ohio markets. The newest venture is List’n Sell Realty, a real estate brokerage based in Toledo, Ohio and soon to be known as the #1 discount broker in the country.

19 Comments

    • Engelo Rumora

      Hi Timothy,

      Thanks for your comment.

      Over the years I have found that the above 3 strategies have assisted many investors in successfully buying their first property and building a strong foundation for future purchases.

      Have a great day.

    • Engelo Rumora

      Hi Eric,

      Thanks for your comment and kind words.

      It sure is looking like a crazy busy 2015. I need more good people on board to support the vision.

      That’s the hardest part In Real Estate or business in general.

      Finding the right people.

      Thanks again and finish well these next 10 days 🙂

  1. karen rittenhouse

    Before you buy:

    1. You must have good tools for comping. You cannot trust anyone else (especially the seller) to give you the correct numbers. You MUST know what a property is worth before you can determine what you will pay. You need to know current condition value, repair costs, and after repaired value. If you don’t know your numbers going in, chances are you’ll get burned getting out.

    2. Have multiple exit strategies. If you plan to sell and it doesn’t sell, can you put a tenant in it and hold it until it does sell? If you plan to put a tenant in and hold it but someone comes along who wants to buy, are you able to sell for a profit? If you plan to wholesale and it doesn’t, can you renovate and sell for profit? We always want 3 exit strategies because plans 1 and 2 can blow up before you know it!

    3. And a team you can trust is imperative. Find money, attorneys, title companies, etc. from other successful investors. The best way to find great people is through referrals.

    Then, get started. The only way to really learn is by doing.

    Thanks, Engelo, for your post.

  2. Good pointers, reversed priority though. A good team is the first step. A good team should be someone who can give you their opinion of the neighborhood you plan to buy in, that means your team doesn’t need a realtor, property manager, or paid professional at first. You need eyes, and someone with attention to risk as your first part of your team. Sadly, many real estate “pros” rely on realtors or agents who aren’t allowed to discuss their thoughts on the area…

    oh.

    And anyone you ever partner with, do a federal background check…

  3. Carolyn Morales

    Never let tenants IOU on their deposit…never let a week late turn into a month or two or three….instead..Screen tenants extensively before you choose. Don’t pick friends of relatives or relatives as tenants….Stay frugal..put bigger $ on properties instead of instant bling. Learn how to renovate diy as well .

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