First step recommendation

[Jouvan Johnson]

Hey Fam,

I'm new and excited, right now i'm immersing myself in books, podcast, forum etc to learn as much as i can. I'm saving money (and doing extremely well) and plan on practicing analyzing houses. I wanted to ger personal advice to get me more prepared so when the deal come i'd be ready. For example: I wanted to start making and  a tenant application and start building business credit (because i heard business credit is stronger than my personal credit). What do yall think? Should i add something or remove something, thanks for you help!

FYI: I want to start with house hacking

[Dave Spooner]

@Jouvan Johnson - congrats! Sounds like you're taking the right first steps.

As you're just getting started, I would strongly suggest focusing the vast majority of your effort on finding and analyzing the right deal. There's a pretty common saying in real estate: "You make your money when you buy, not when you sell." That could be paraphrased to say that your biggest risk of making a mistake and losing money is when you purchase your property - and your first one matters a lot.

That being said, it's still great to focus on preparing yourself in other ways. For a basic application, I'd recommend at the very least three years of employment and rental history, two emergency contacts to have on file, two-to-three personal references, and disclosure of any pets or unique circumstances. Here's an article that goes a bit more in-depth: https://innago.com/rental-appl.... I'd also highly recommend screening the tenants credit, criminal, and eviction history.

Regarding business credit: it may be overkill. Firstly, check if you even need it. You can reach out to a lender to see how their rates change based on your credit score.

Secondly, and more importantly, if you're house hacking, it won't matter. The great advantage of house hacking is that you purchase the property as an owner-occupant. That means you can put less money down and even potentially get a better interest rate. If you try to buy the property through your business, it will totally nullify this advantage as the bank will no longer consider the owner (the non-corporeal LLC) the occupant.

Once you buy the property, you can transfer it into an LLC, but that won't affect the initial rate you get or your ability to qualify. Hope this info helps!