I'm currently 17 and i'm turning 18 very soon. I'm really want to make real estate my full time career. But, do this I need to get my foot in the door. I looking to buy my first rental property but I need some help. Below I have created a outline for how I'm going to get my first rental property. It doesn't have every little detail all I'm trying to outline the steps I need to take to begin. The biggest problem i'm running in to is how am I going to manage a property when I first get it (that is why I stopped the outline at self-management) and how can I make sure my month expense don't exceed rent coming in. I wont have very much money to spend on unexpected expenses right away but that is a risk i'm willing to take to get started.
Other than doing my own research and educating myself on this industry i'm working two jobs to save up for a down payment and building my credit up so I can get approve for a mortgage.
If anyone with rental property experience is willing to give me a few pointers on what direction to head in to get my first property I would great appreciate it.
Develop a plan- Whats the max price I can afford? How much can I afford for a down payment with the money I have?
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- ARRANGE FINANCING: where can I get a loan from and with what interest rate. (Do this before I even look at a property.)
- FHA loan and low down payment (3.5%)
- 203K loan: needed repairs of a property into the loan itself
- Figure out what the monthly payments would be to pay down the mortgage.
- Look at average rents of similar houses and see if it is profitable factoring in insurance and taxes
- Calculate break even
Find an investment property- Consider:
- What kind of investment property you want to buy
- Town house
- Signal family home
- Condo
- multifamily
- How much you can afford to pay
- What kind of neighborhood you want to invest in
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What the average rent is in your area
- What kind of return on investment you hope to make.
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Expense involved with owning the property: taxes and insurance (once found, compare with average rents of similar houses in the area)
Searching for properties by filtering in the area you want, at the price i need and the average rents higher then your break even point: use the following to find properties:
More importantly talk to real estate agent, give them my criteria and tell them to let me know if they find a property that fits.
Once I find a property talk to agent and make an offer lower then posted and start negotiating. To cover costing cost I will negotiate closing prices in the final sale price.
Closing costs?
Putting the house on the market- Putting the house up for rent either through a management company or I will do it myself.
- Renter warehouse: 1 unit/
- Land lording myself??
