Jumping right into a bigger deal?

[Ted Caputo]

I am a new investor. I've been speaking and working with some BP members. In about a week I will be selling my home and walking away with a nice amount of equity. I was thinking about doing a few smaller deals to get started but would it make sense to jump into something larger? I am guessing I would have to do this with a more experienced investor? I'd love to hear from some of you that may have jumped into bigger deals.

[Ronald Allen Barney]

I would say for the very first one mitigate risk as much as possible.  That may or may not amount to lower sale price.

Thoroughly check the title.

Walk through it with contractors who know what they're looking at.

Investigate all aspects of any financing you're getting into, and their implications.

Lowball the offer, not to a ridiculous range but just about the range that makes you feel slightly uncomfortable offering.  You can always up the offer later.  Know the offer limit for what would still cash flow given comparable rents in the area.

Best case scenario nothing at all goes wrong and you build confidence.  Worst case scenario some things go wrong and you learn.  And you learn with one deal's worth of money, so there'd be every reason to refactor your approach and keep investing.

Cash is your ammo.  Don't blow it all on one deal.