All Forum Posts by: Derrick U.

@Wes Blackwell

Thanks for the advice.

How will I know if I'm ready to purchase a rental property?

Most people are saying to start small and manage it myself but I have a full time job 3 hours from the Phoenix market. I don't quite see how that's practical. I understand however that I should understand the ins and outs of managing properties before I outsource it. I'll need to figure that one out.

Should I start with 4 units? 6 units? 10units? What's considered small? Should I stay in class a, class b or class c properties.

I feel like I know the areas in Phoenix with potential. I used to live there for 10 plus years.

When I see a property that's $1 million I don't know if it's $1 million, $2 million or $500,000. The rents are just as puzzling. These dumps in Phoenix are going for $1-$1.50/sf! (I.e. 500sf 1bd/1ba $750!! In Maryvale!!) what!!!! Absurd. Who's paying that?!? That comprises a large chunk of their take how income doesnt it?

Back to going small. Is the problem of one vacancy comprising a larger portion of your noi.

@Christopher Hunter

I appreciate your advice but I work full time and on the weekends to raise capital for my dream.

Is there any other way to educate myself besides shadowing someone?

My biggest concern is buying a property that loses value after I purchase it and tenants that are inconsistent, that destroy the units, or that are litigious.

When I look at a property I ask myself if I'd want to live there and would I pay that rent. It's hard to figure out because most of the time I'd want to live in the apartment but I wouldn't pay the asking rent. I'm seeing a $1/sf to $1.50/sf for what I consider dumps. In fact I wonder who's paying these rents sometimes. It must comprise close to 50% of their income per month.

That's concerning too because what if a recession hits us again? These people won't be able to afford to rent these apts. Then what? People start moving in with friends and family and the demand for rental homes drops along with the price.

Essentially where are they getting these rent prices from? Are people so desperate to live in a particular area? I guess their job or school brings them there and they find themselves with limited options.

My dream is to one day (in six years) own something like this.

https://www.loopnet.com/watchlist/Folder?Id=16496626&ListingType=FS

Anyway these are my concerns.

@Sam L.

Agent: gets the commission

Property manager: gets revenue from the rent

Contractor: is paid for and renovations.

@Bryan Hartlen

Thanks for the advice.

@Christopher Hunter

What is an MSA and REIA?

@Greg Dickerson yes. I think I do.

I just decided a week ago that I need to be financially free in 6 years.

My goal is to own a multi family rental that generates $200000/year or more.

I have to start off small because I don't have $2 million dollars laying around.

I've called agents, looked at properties on loopnet.com, started reading some books, and watched YouTube videos.

What I'm realizing is that I need an awesome team of professionals that can

A. Let me know if a rental deal is good or not

B. Help me get the best loan

C. Identify and fix and structural,mechanical, electrical etc issues on the rental

D. Manage the property 100%. Collect the rent, deposit the checks,answer the tenant concerns and complaints and other issues.

I'm targeting the Phoenix metro area. I love Tempe and Scottsdale. These communities seem the most robust for employment and entertainment. However I'm looking all over the metropolis.