Next Steps For a Beginner?

Question

Hey BP Family!

I do not currently own any property but I am super excited to get things started and more motivated than ever. I have been learning and educating myself on the process. One of my weaknesses is analysis paralysis.

So my question to you vets or anyone who has taken those next steps is this. After you have you Clear Cut Criteria, what resources do you use to start running the numbers and evaluating properties to get the experience? I'm seeing a ton of info on zillow, realtor, etc.. What's important, what's not? Is there an excel sheet I can use to make calculating cash flow simple?

Also, a bit of background - I am from Jersey and have lived in Charlotte, NC for 4 years. Working on rebuilding my down payment funds thanks to COVID and my credit score is steadily improving. Big caveat is I just renewed my lease for 12 months.

What would you do if you were in my Reeboks?

Any and all advice is appreciated !

Joe Villeneuve · Answer

Percentages lie...and they don't tell you what you need to know about your investments.  Look at the analysis numbers that involve percentages, and try to figure out what they tell you...that's means anything important.  Then look at the numbers with $$$ in front, and ask your self the same questions about value.

Andies Shepherd · Answer

@Joe Villeneuve

Joe if you ever wanna come to Texas (Austin), I would love to buy you a steak. Your advice and comments are Next Level. Thank you for always sharing!

Shareef Hood · Answer

Hey Account Closed that's a great story, I appreciate the specificity! Hearing that makes me even more excited to get started. I know my long-term strategy is buy & hold. I plan to house hack to get things started and so now it's just about taking the proper steps to get things underway that I'm working on. Thanks for the insight and congrats for getting under contract!

Account Closed · Answer

@Shareef Hood

Are you looking to buy and hold? Flip? House hack? I think figuring out where you feel most comfortable starting is the first step.

I’m a newbie here as well. We just bought our first rental property, which we close on in a few weeks.

For us, we figured out if we had the means to make the down payment required on a property, and if we could float the extra mortgage payment in the event we didn’t have renters the first month or so if any updates were needed. Then we started looking at properties within those parameters in popular areas around town. As we identified properties we would pop the details into the Rental Property calculator on BP and make note of the cash flow and property details in a spreadsheet. You can edit the reports to test different properties for free. We started calling to see the properties we felt would provide the best cash flow. Along the way we stumbled across a realtor who happened to be an REI, and she has shown us the ropes and we ended up buying one of her flips. We got super lucky, but had we not just taken the jump and started calling to see properties we would have never found out about this property. The renters moved into the property this past week so we will cash flow from day one. I imagine our story is an exception to the rule, but at the end of day we knew without action we’d end up stuck in analysis paralysis.

If you’re not already listening to the BP podcast do it! I’ve learned so much from listening to them and browsing the site, and I feel that it gave me the confidence to know we could do this and we were making the right choice.

Good luck in your journey!

Joe Villeneuve · Answer

Yes!!!

Joe Villeneuve · Answer

1 - Understand that markets are broken up into three main parts:        A - Micro-markets        B - Square footage of properties...all where each end of the range is no more than 20% from eachother.        C - Type of analysis/property (4Sale/Sold/Rentals)

2 - Analyze the numbers with $$$ in front, and ignore the ones with %%%% behind them

3 - It's about Money, and the money you are analyzing for is the spread between the cost to enter and the cash coming out.  There are two of them...profit and cash flow

Joe Villeneuve · Answer

If you have the big AP, then you haven't correctly learnt how to analyze markets yet (notice I said markets and not properties).

Susan Sutherland · Answer

Hi Shareef - Have you tried the BiggerPockets tools?  I think they are great - just click above for Tool and choose the Rental Property calculator and start plugging in the numbers.

If you haven't taken a webinar, I really would suggest doing that as well.  Brandon goes through using the tool and plugging in the numbers to evaluate deals.

I am in Charlotte as well.  Happy to connect, provide feedback or help you any way I can.

Joe Villeneuve · Answer

PM me if you think you need more clarity

Tyler Mutch · Answer

@Shareef Hood yep! So my situation was sort of strange, but yes. I basically set aside the money above and beyond Mortgage, taxes, and insurance, which normally would be set to "repairs and maintenance" and set that aside for the repairs it helped me finance and decent portion of it.

When I bought it rents were 1150, after repairs and having lived in it for free for however long rents should be 2100. so almost double, but I'll have 15k or so up front to get it up to market rents in the upper unit, and finish our unit the way we want it!

Let me know if you have other questions!

Next Steps For a Beginner?

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