Newbie here. I've consumed maybe too much podcasts/blogs in the last week or so but it's always about landing the first deal and then it's supposed to get easier from there. So that's the part I'm getting stuck at and maybe not seeing the big picture yet.
If my goal is to first purchase a small multi-family to live in and rent the other spaces out. How does that first property really help me get to the next purchase quicker than the time it took for me to save up for the first property?
How do you turn that first property into 10...20...30 in just 5-10 years like I see in the titles of most podcasts?
I definitely still lack a lot of knowledge which is why this is confusing me so I'm hoping someone could help my pea brain out
Hey Kevin. Welcome! Don't worry about getting to 30 yet because once you are at 20 you will know how to do that. I love that you have longer term goal as far as units go.
For your example, lets say you buy a property that has 2 out of four tenants in it because it needs a bit of love. You fix it up get the 2 vacant units rented at market rent. When the leases are done for the other two units you fix them up and increase to market rents. Now that you building is nicer and renting at a higher rate a bank will value it at a higher price. This is the basics or forced appreciation. Then you refinance and take out enough for a downpayment and repairs for your next. Do the same thing for this building. Rinse and repeat then before you know it you have 3-4 4plexes. they are all fixed up and by then your first unit has increased in even more value because you keep the rents at market and you added a washer and dryer room and you have professional management. Now you refinance all 4 buildings or sell and roll them into a down payment for a 30 unit building and boom financially free. It is that easy ;).
But that is kind of the down and dirty! sorry it was so long.
Thank you so much! I guess the biggest first hurdle is saving up for the down payment + repairs for that first property and actually finding a good deal.
You hit the nail on the head. But remember if you find a good enough deal the rest will fall into place. And there is also the option to buy with 3.5% down and if you go VA 0% down meaning you might only have to save or closing costs, emergency fund and repairs. There are loans that combine repairs and financing the property. So you have options.