Amount of Research Needed to Begin

[Sam Belliel]

Hi! My girlfriend and I are looking to purchase our first rental property this year. In looking at what the effort will be, we aren’t sure if we will need to pay for a class or do more research independently which has sort of halted us in taking action.

We would love to hear what your stories are and what different steps everyone has taken to get going once they have the motivation and resources.

Was it a lot of research or more simple than it is made out to be? Is taking a course the way to go and will save you a lot of hassle in the end? Was spending the weekends researching what made it work for you? Any input is appreciated! Thanks!

[Ryan Howell]

Part of real estate investing is getting comfortable with some level of unknown. Every piece of real estate is different and you'll always be learning. Start with your goals and strengths and use that to pick a strategy...whether BRRRR, house hack, etc. I like to also look at the worst case scenario. In the long run, real estate is generally going to be a good investment, so just make sure the first deal is not going to undo you financially by ensuring to look at the worst case scenarios. Here's an example...

Lets say you're buying a SF or duplex to rent long term.  

What happens if your wrong on your rents?  Do you have a way to still cover the mortgage?  On my first one, I knew I could cover 100% vacancy from my work income if absolutely necessary, so I didn't have to worry.  I also budget a property manager, but could manage on my own if necessary.

What happens if the ARV is wrong? If you're estimating you will have 30% equity when your done remodeling, you can be off 30% and still be okay. Do you think you're within 30% of the ARV? If so, you should still break even, worst case.

What if your repair estimates are wrong?  Can you go over on nights and weekends yourself and lay flooring or paint to reduce your remodel costs?  Do you have a backup plan there?

If you have a backup strategy for each of these scenarios, then you're probably going to do just fine.  I read books and listened to podcasts (and still do), but I reached a point of saturation where I knew I needed to move forward.  Realize you'll never have every answer to every question.