First Rental Investment Strategy

[JoJo Tucker]

Hello BP Community,

What was your strategy for the first rental property you purchased? I plan on purchasing my first out-of-state rental investment by the end of the year in Houston, TX. I would firmly say my criteria is geared towards a more safe investment that may not yield as much profits (newer properties in need of moderate cosmetic upgrades), but will hopefully be one that does not come with many expensive surprises. 

However, I am a little concerned that I will not be optimizing my savings. As previously stated, I do plan on undertaking a mild renovation (Paint, flooring, etc.) in which I can force a little appreciation, but am I leaving a lot of money on the table because I do not want to swing-and-miss on my first deal?

What was your initial strategy? What were the results and would you do anything differently?

Thank you!

[Scott Sutherland]

@JoJo Tucker My wife and I bought our first home together in 2011. It was a foreclosed duplex in Austin. We owner occupied and financed using 3.5% down FHA and rolled our closings costs into the loan. I also collected the 3% commission as the buyer's agent so our total out of pocket was $1500. After about a year we converted the other unit to Airbnb and used the extra cash flow to upgrade the property. We still own that duplex today.