Getting started, small update

[Karen M.]

Hi Everybody!

I joined Bigger Pockets last week and received such a warm welcome from members here. Thank you. This is a great online community and I am so excited to learn more, connect more and hang out here with everyone.

One of the great tips I received is to check out the Bigger Pockets podcasts -- it was an awesome suggestion and I've been listening to several... they are fantastic, I love hearing the stories and getting to know the interviewees and their unique ways of doing thing with real estate. It's a fun, easy and interesting listen -- love it.

OK, so i"m in reading mode -- ordered a few real estate books, I've been talking with my spouse about the possibilities, and thinking about our plan and strategy for what we want to do.

I am thinking that we will look at buy-and-hold for rental income / cash flow and our goal is income and eventual financial independence. I am considering single-family vs. duplexes and multifamily and we want to be in good school districts and have nice homes available for rent.

There is so much to learn. I have a few questions... and I've probably jumped the gun and found an interesting property in the MLS, although we are not ready to go yet, there is so much more to do.

Questions for everyone....

1. Did you get a real estate license? What was it like and what does it allow you to do to be more effective?

2. Did you set up a LLC or corp structure before purchasing any rental property?

3. OK, I just want to show you a property that I think is nice. Just for fun/learning. It is a nice property, looks in good condition, and in a good area. It looks -- am I using this word right -- turn key, as in, it's ready to rent and doesn't need a big rehab or clean up.

http://www.firstweber.com/vp/ListingServlet?SITE=FIRSTWEBER&ScreenID=LISTING_DETAIL_P&cd_MLS=1844509

I have to learn how to price properties, because... with a guesstimated rent price, it will not really cover the mortgage/interest/expensive taxes and there is nothing left over.

It feels too soon to call and have a chat with an agent, but I am so curious about the rules for what the price has to be in order to make a decent buy and get decent cash flow.

Of course, I need to do more reading. Any comments are appreciated and I really enjoy the interaction here. Thanks again! Have a wonderful week!

[Mike D'Arrigo]

Karen, the big warning sign that jumps out at me is that it won't cover the expenses which means you'll have a negative cash flow. You mentioned that your goal is cash flow income so this property doesn't seem to fit with your goals. Even if your goal is appreciation, I'm a big believer that you should not have a negative cash flow. In the "old days", i.e. pre 2007, it was common to take a negative expecting things to go up but all you have to do is ask people in Phoenix, Las Vegas, Atlanta, Cape Coral FL and a few others I may have missed, how well that worked out for them. The first thing you need to do is clearly define what you want. If your goal is cash flow then you need to define how much cash flow you want and what kind of ROI you expect. Evaluate any potential properties against that criteria and stick to your criteria. A big mistake many new investors make is straying from their criteria because they fall in love with a property. Keep in mind that you won't be living in it.