How long did it take you to buy your first rental?

Question

I think one of the biggest mistakes I see investors make is wanting to buy a property as soon as they figure out they want to invest in rental properties. I have investors say I can't fid any good deals on the MLS, what am I doing wrong?  Well your not going to find a ton of awesome deals on the MLS at any given time. I have bought all ten of my rentals off the MLS, but it took time to find those deals. I will go months without seeing a deal that would work for me.  Remember you don't have to buy a rental right now, especially if your tight on cash and can only buy one for a while.

When I bought my first rental in 2010 I think I have decided for sure I was goi g to buy a rental at least two years before that. It took me time to save money, then I bought a new personal house and had to save money again.  Then it took time to find that great buy that would also be a great rental.

I am curious how long it took other investors out there to buy their first rental after they had decided for sure they wanted to invest in rentals.

Cory Binsfield · Answer

My very first deal took about 4 years. At the time I was starting a new business and my self-employed tax return was an issue when I first tried to qualify for a loan.

Fortunately, I persevered and kept working hard on my business while scouting for the right deal. Eventually, the perfect deal came along and I seized the opportunity and closed in less than 30 days.

It was an owner financed deal and we literally wrote our contract out on paper napkin over some beers-he was an odd dude who demanded we meet at his house and that I bring him a 12 pack before we talked business.

I'm glad I was patient since this first property allowed me to learn the ropes as a new landlord in terms of both rehabbing and tenant management.

It also taught me about the power of owner financing and how you don't always need a bank to realize your goals.

Arlan Potter · Answer

I also have a nephew in another state and he liked the idea of getting into REI. He started taking courses. Two or three that cost him a total of about $12000 dollars to take. They gave him a lot of ideas about wholesaling, subject to's, wraps, and balogna. Several years later, and he has yet to buy a property.

Not to totally diss the courses people sell, but I have never been to any classes or courses. I did read two good books -- "Buy it, Fix it, Sell it" by Myers and "Rich dad, Poor dad".

I try to tell people not to think too much. Go out and find a cheap house in a decent neighborhood and buy it.

Arlan Potter · Answer

My first rental was bought before I knew I wanted to be in the RE business. I was sitting in my accounting office minding my own business when the phone call came. My Mom called. She said that the S & L she worked at had just reposessed the house that my grandparents had lived in for ever.  The people who bought from them had gutted half of it and left a ton of junk in the house.  I bought it for $2900.00.  That's how I got into this game.  That was eleven years ago. We now own 55 units.

Marcin Ferenc · Answer

I found one within 6 months and then my second one about 4 months after that. I am very happy with both so far.

Mitchell L. · Answer

It took me around 3-4 months to find the "one".. Looked at tons of places before I felt comfortable with the numbers, property, location, etc...I agree that the deals are scarce and it is better to hold on to the money for an extra month or 2 than throw it at something that will make you lose thousands of dollars over time or more.

Sean Kuhn · Answer

I actually took a year to wait for my for Primary residence to get approved(short sale) and I had planned on buying a rental when the right one came up. Literally 2 weeks after move in a great deal came up in and I bought it. MLS is all I do. Sometimes it takes months before I'll even find a deal I'm interested. I believe its been 5 months since my last purchase, and I'm coming up on a closing soon. I literally hadn't seen a single one I was interested in since that last one. I have 7 great properties and one bad one that I can't wait to sell. I learned so much from it, and in a way I'm glad I bought it.

George P. · Answer

same here.

in 2008 we got an email from an agent regarding Obama's 8k first homeowner credit and wifey looked at a few houses. i was working on our bathroom at the time (complete gut) and she came back and said, "i found a great house we can rent out". i laughed and said "pffft, sure you did".

now we have 12, going on 14 soon.

Kathleen Leary · Answer

About 2 1/2 months - an REO, it took some back-and-forth to agree on a price. My second one (once I decided to buy it) closed in one month. Sellers wanted OUT!

Bryan L. · Answer

Most of mine have been MLS deals too.  I've learned some ways to find what I call "hidden MLS deals".  But they're not just all over the place all the time.  The really good deals happen, but not every day.  And you have to really hunt for them sometimes.

Ernesto Pena · Answer

I bought my first investment home by accident. I was being deployed and I did not want my wife to be at our how 1700 miles away from the closes relative that we trust. So I packed her up and sent her back to Texas. She lived with her brother for about a year then moved in with her mom and dad for about 6 months when she called me up and told me a property that her grandfather owned came up for sell. I looked at our finances and found we could afford it since the man was willing to take money down and payments we could afford. When I came back two years later and three years after that we stated renting it out. Now 6 years later we have the same renters and they are happy.

Then my mother passed this past October and we had to do something with that property. I decided that we might as well rent it because I would never live there again. So we received several call and we settled on a tenant and they pay on time every month.

This may we closed on another house and now we are proud owners of three rentals with two year lease contracts. They all pay on time and it has worked out well.

This all started in 2008 and it was all by accident. Take your time and wait for the right property. You will be glad you did.

How long did it take you to buy your first rental?

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