Any Tips on Buying My First Property?

Question

Hello Friends,

I am a very new and motivated player to the Real Estate investment world and ready to buy my first rental property. While I am still working on my end goals, some of the concrete ones :

1. Will start with a single family home, Long term rental investment.

2. Will add atleast 1 property every year starting *2023* onwards.

3. Will play safe with first investment and use it for learning.

4. First rental 80-300k ( 20% down, 80% loan), prefer to keep some positive flow if possible, Or atleast neck to neck.

5. Started exploring below areas but need suggestions from experts if these are already saturated and there are other better options with growing potential 5 or more years down the line.

a) St Augustine/Jacksonville/Tampa (FL) --> Need more suggestions, not sure which one I should focus more on.

b) San Antonio Texas

Last but not least, recommendations for reliable team players in those areas with whom I can build long term partnership for exploring/closing deals, managing the rentals etc.Thanks

Leo R. · Answer

@Cameron Pronk you mentioned that you're brand new to the game, but you've listed out a ton of rules for yourself.  What are you basing these rules on? (Since you're brand new, your rules aren't based on first-hand REI experience)...this is a bit like creating a bunch of rules for yourself to follow before you fully understand the game.

I'd suggest stepping back for a moment.

As you learn more, you may discover that some of these rules you're creating aren't useful (for instance, putting 20% down isn't always the best route).

It sounds like you're considering an out of state investment--read up on why OOS plays are usually a terrible idea for a beginning investor (I and others have written about this issue a lot on the forums). ...we see tons of beginning investors on the forums with nightmare stories of OOS plays that crashed and burned--read up on those, too.

There are far better strategies than OOS for beginning investors.

As others have mentioned, a house hack is one of the best ways to get started in REI. Again, plenty of folks have written about what makes a HH such a great entry point for beginners, so I'd suggest reading those posts, too.

Good luck out there!

Bob Stevens · Answer

Yes 1s tip, find another market, FL is headed for a correction. I will not touch it. Also do nothing without a team in place, NO your realtor is not part of your team. Get to your local RE meetup. Connect and learn, The most important thing KNOW YOUR NUMBERS, nothing else matters. Well the only way you are going to is learn what the real costs are to reno, not retail pricing,

All the best

Bradley Buxton · Answer

I agree with Jordan that house hacking is the best way to go because you can get a lower interest rate and get to practice being a landlord while being on-site.

In Reno NV, we are seeing properties in the 300K range that are in fringe neighborhoods where the surroundings are being redeveloped with new apartments and close to the hot spots in the city.  We also have tech industries moving into the city and surrounding areas.  I would recommend looking for places that have up-and-coming neighborhoods, tech industry investments, and geographically limited building starts becase you are looking to hold longer term.

Areas like AZ, FL, ID have seemingly unlimited growth and could in the future have an oversupply; they are also in the past have been more volatile markets.

Do the math and work with agents that understand the math.

Randy Rodenhouse · Answer

@Cameron Pronk

Check out my recent post where I discuss what I would do if starting out in real estate and wanted to buy my own home and get rental income.  Buy a 2-4 unit Multiunit using Fannie Mae new program of 5% down program which starts this week.

https://www.biggerpockets.com/topics/1154617

Jordan Moorhead · Answer

Where do you live? I highly recommend househacking to get started!

Isaiah Lopez-Torres · Answer

I'm new to REI as well but I recommend the house hack. Get in a 3.5% down FHA or the 5% down with the new conventional guidelines. It also gives you landlord experience while living on the property. Good luck though.

Peter Chen · Answer

Hey CP,

I just started with exactly same goals.. Good luck and keep me posted with your stories and I will do the same. Lets connect.

Thanks

Peter

Taz Zettergren · Answer

@Cameron Pronk welcome to the forums and congrats on the first post! Those are some great markets although it might be difficult to break even in those areas. It seems like you are but my biggest advise is to take your time and really research who you are working with. There are several referral sources out there that don't have any interests in the processes from start to finish, they're just worried about closing a deal. In those situations the interest aren't always mutually aligned so it can taint your experience whether it be on the front end or the back end.

I'd recommend checking out Memphis, Little Rock and DFW as well. I work with hundreds of clients who do this passively with a company that handles everything in house from purchasing the home, to renovating to managing the homes themselves. Feel free to reach out, I'd be happy to discuss with you in further detail. Best of luck investing!

Arlene Dayoan · Answer

@Cameron Pronk If you're starting out in real estate, if you haven't already purchased your primary residence, I would recommend buying in your market a duplex (unless it's a place like CA where real estate might be too expensive) and house hack. Let your tenants help you pay down your mortgage and build equity.

If you do live in an expensive state and plan to buy out of state I would recommend TX, but get a team in place first. I have invested there before because there are a lot of great deals.

I also heard OH is great to invest in since the real estate prices are relatively low and the jobs stable. AL and TN are also good states to invest in.

Just make sure the numbers make sense in any deal you do.

Sharon Powell · Answer

Welcome to your new adventure! I wish you all the best in your investing journey. In San Antonio right now, you can cut your teeth on a new construction SF. You won't get rich (ie buy at 175K, rent at 1700), but it's a low risk intro to investing, no deferred maintenance for up to 10 years, and the builders are offering some great end of year concessions right now. Let me know if you'd like a list!

Any Tips on Buying My First Property?

Most Popular Reply