How to buy your 1st rental property when you have a full time job?
Buying your first rental property can be challenging when you first starting out and do not know what direction to take. You have heard so many people making a lot of money in real estate. I share with you that is the fact and you heard it correctly. But I also want to warn you it will take time and commitment on your part to make it happens correctly.
I accidentally become a real estate investor because I bought a new home and my previous home turned into a rental. I saw the benefit of receiving almost $500/month cash flow after paying for all the expenses from the rental property. I was shocked seeing the benefit and open up my curiosity and interest about this business, but I did not know what to do next so I started to read as many real estate investment books as I can get my hands on. After reading a few books, I decided to take formal training so I signed up for a 3 day real estate seminar. I paid $7900 for the course! Even overwhelmed with a lot of real estate strategies, I was glad that I took that first step to learn about this business and here are the steps that you can follow.
1. Know your financial situation; organize your finance –money available to invest or plan to save for the down payment.
2. Make a commitment to learn about this business, and read your first real estate book. I have condensed my 16 years of knowledge into this book and you will learn all the fundamentals about buy and hold real estate investment. Keep learning and make time to grow this business to meet your personal financial objectives.
3. Get yourself approved for a mortgage loan from traditional bank/mortgage broker. If, for any reason, you’re not qualified, then seek and learn about other financial options.
4. Find a good realtor who specializes in working with real estate investors (vs. just home owners)
5. Find a cash flow rental to purchase, going out to see as many properties with a realtor as you can, so you get familiar with the area as well as the price range. Make sure to analyze the number and do the necessary due diligence on each of them; as you do more, it will only get easier. It may take 45-60 days to find your first rental.
6. Make a lot offers - you may analyze 50 properties, make offers on the best 3 properties, and expect to have only one offer accepted. Always have a mindset to get good investment. Focus on quality of the investment, not quantity.
7. Do the rental property inspection.
8. Close the purchase.
9. Decide to manage the property yourself or hire a property manager to manage it.
Follow the steps above will help you organize your business and allow you to plan out what steps to take next. Buying your first rental is not as difficult, but when you have a step-by-step process to follow, you can successfully build your momentum to the final close on your first transaction.
I started out owning just one rental and grew it into 45 rentals while I had a mortgage company to run and I believe that you can do it as well. Which steps above would you like to learn more about, or which step do you believe is the most challenging for you and why?
Please comment below of what you think.