Confidence Boosters Needed for First Deal

[Hilary Hageman]

My husband and I are working on getting financing lined up for our first rental property purchase.  We worked so hard to pay off our home and have absolutely no debt.  The idea of "good debt" seems very counter-intuitive to us.  And to be honest, we're a bit scared!

What if we can't get renters? What if the place looks alright but turns into the mansion from The Money Pit? How can we be sure to not pay way too much for a place when we're such newbies? I've been looking on MLS for a few weeks and almost everything comes up with bad numbers for an investment property.

I have a plan laid out for the next one, five, ten and fifteen years which includes acquiring small multi-families and holding them as a landlord.

What are your tips on finding good deals and how do you boost your confidence to step out there and make that first buy?

[Alex M.]

Hi Hilary - sounds like you and your husband are about to begin your investing adventures. I just posted for the first time in a while today about closing on my 8th, 9th, and 10th units this coming Thur. It was almost exactly 1.5 years ago that I was in very similar shoes to you guys - wanting to get in, ready to get in, just not so sure I was able to do it and not lose my shirt or make the "wrong" first decision.

I did a similar thing and posted a lot here on BP to get confidence and advice, and have to say that jumping in was the scariest, and thankfully, one of the most rewarding decisions I have made. My first unit did have more problems than I predicted, it did take longer - like 6 months longer - to get it ready and rented than I anticipated. All that said, it turned out great and provided a solid stepping stone into the next investments. Good luck to you with whatever property you choose to go in on - I would recommend two things:

1. run the numbers on your deal here on BP to get feedback and support on your first purchase decision
2. don't look for perfect - good numbers are good enough on the first one. Get it, learn, and move to the next.

I look forward to hearing how things go!!!