How do rookies actually get started

Question

I have read many posts/links, title always says "how to" but the info is vague. I have not found a single post/link that actually teaches "how to". In other words, the posters are saying so much but teaching very little.

Damaso Bautista · Answer

@Austin Warford

1. Have a high paying job for two years

2. File taxes for two years on that income

3. Have H/R able to give you an income verification that you job and hours are not in jeopardy due to COVID

4. Have a great credit score

5. Have money in the bank to cover 25% down payment, closing costs and 3 to 6 months reserves

6. Submit your information to a mortgage broker to see how much home you can afford

7. Look for a property that is a good investment based on the numbers (look at Brandon Turner video on youtube how to analyze rental properties using the 4 square method)

8. Put in an offer on a house/ get the offer accepted/ go into escrow/ do your due diligence/ close on home /get insurance

9. Make any repairs needed to make rent ready

10. Advertise the home for rent based on what the comparable locations in that neighborhood are

11. Accept applications and review them for credit score, income requirement, past rental references

12. Accept a renter/ fill out a lease/ get security deposit and first months rent on the day of signing/ give them the keys

13. Wait for the first of the next month to collect the rent

I know your post said people say alot and teach nothing.  There is alot of details that need to be experienced to be learned and I don't think a post can say it all.  If you have specific questions about certain things ask.

When I did it the process isn't that complicated.

Let me know if you have more questions.

Matthew Irish-Jones · Answer

@Austin Warford get an FHA loan and buy a double that needs cosmetic upgrades.  Live in half and upgrade it.  Rent it out and move into that other half and repeat.

Keep your living expenses low and save for another double.  Years from now refinance the first home and use that Capital to buy more homes.

Blaine Alger · Answer

Getting past the first house is the biggest challenge in my opinion. There are so many "what if's" and it can feel very daunting at first glance. Once you work your way through the first property, and get the template down, then it is just copy and paste for the next deal.

Here are the steps i would focus on in order to get started:

-Make sure your financing is lined up. Anyone who tells you that you can buy houses  with zero money is full of it. It is not impossible but i don't see how it is feasible for someone who is starting out and has no track record. Once you gain more experience then you can start looking for those no-money deals, but at first, just stick to the easy stuff (20-25% down, personal rates, 30 year term).

-Know how to run your #'s.  You definitely don't want to start off your investing career with a deal that loses money each month.

A.  Get your market rent. I use the rent-o-meter app to get a ballpark and then i cross reference that with listings I see on facebook marketplace/Zillow to get the exact rent amount nailed down.

B.  Identify all expenses. You will have your mortgage payment but then be sure to account for taxes and insurance. This total payment is called PITI. Then I take away 25% from the rent amount to account for the variable expenses (property mgt, vaccines, cap ex, repairs/maintenance). Don't forget to check for unusually expenses like HOA, trash or utilities if the units don't have separate meters. Then take the rent, subtract PITI ,variable expense and then you are left with your pure cash flow.

-Go find some deals. Start by getting connected to a RE agent in your market,I would suggest trying to find someone on BP because they will be up to date with the lingo and have somewhat of an investor mindset. Something I did not know when starting out, is that a RE agent is free for the buyer because the seller is the one paying the commission. So there shouldn't be any reason to go meet with someone and have them start looking for deals for you. If your market is super competitive, then you might want to consider looking into off market deals but that is a completely different conversation.

I hope this doesn't feel  too vague because i always try to give concrete advice but if it does, feel free to message me and I would be happy to go more in depth.

-BA

Carlos Garcia · Answer

BP articles are good for a start but they should not be your only resource.  If you want to learn how to do things, you need to read books, talk to people, and start creating systems and processes based on all the knowledge you learn.  Articles will only give you some things here and there, but if you want it's time to pull the trigger you need to make sure you have enough knowledge to move forward with confidence.

Nick C. · Answer

Those post/links are vague on purpose. You get just enough useless, dated information each level until your credit card is maxed out and all you have to show for it are those fake, cheesy success stories. If you really want to learn how to, get a job on real estate, preferably with a person or company who is doing what you want to be doing.

Avery Heilbron · Answer

@Austin Warford read some books and listen to some podcasts that are published or created by this very site. You have to do your own research!

Austin Warford · Answer

Thank you, you've said less and taught more. That's what I'm after!

Austin Warford · Answer

I've looked over some properties, but I intent to look over dozens and dozens more. Doing the numbers as if I was actually buying. Getting familiar with the process.

Austin Warford · Answer

Thank you to all who have replied, I have been self teaching and have got the ball rolling!

Jordan Moorhead · Answer

@Austin Warford find a realtor, talk to a lender, househack a single or multi family

How do rookies actually get started

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