Quote from @Nicholas Ramirez:
A lot... ...My question is, for someone who is usually so focused on planning everything out first, (ex. waiting to be in a strong financial position), what would you recommend the first 3 steps to be to "taking immediate action?"
Do not take immediate action until you believe you are ready to do so. If your thoughts are telling you to wait until you're in a position that you think is strong enough financially to be comfortable with this new business, Listen to your own thoughts.
Notice I said new business and not investment.
If you look at your rental house as a business, which it is. That will allow you to see it more realistically.
Once you find a house that you believe would be a good rental, meaning desirable to your target market of customers (people within a couple of mile radius of the place), and all of the costs of monthly ownership that you can accurately project fall below the rental amounts that you project that you can get from your target customers, then you have a possible business asset that you can use to produce income, and have renters pay down the mortgage, while hopefully it goes up in value at least with the rest of the economy.
There are formulas that people use for the down payment amount and the return on their investment and et cetera et cetera. That is part of the learning process.
As you run your business, you may have to buy a new roof unexpectedly, or replace the hvac system unexpectedly, or replace kitchen items on a turn because they've been destroyed or reached the end of their service life.
What I'm saying here is the reality of it is you will most likely have to plow back into your business money that you receive as rents that you intended to keep personally- sometimes.
Also, There may be times when you must pony up some additional cash to keep your business operating.
Maybe the roof blows off in a storm before the end of its service life and all of the roofers are charging double and triple rates, and if you don't replace it the rain will come in and destroy your ceilings and your renters will leave and you will not have anyone as a customer for your business because the interior is destroyed.
This is called having a cash reserve for the business. You can draw on.
Also know that turns are costly and will eat into your profits like an alligator. So you need to be able to turn the unit quickly for a new renter every time you lose one.
Relying on just anybody to do this means you might have substandard work, or not to code work etc.
The turn is an ongoing part of the business that you cannot always predict when it will happen, but you need to have in your rolodex reliable people who can do a workmanlike job for you quickly and not three months down the road.
Sorry about all of the super long sentences. I wanted to give you this as a concise manner without any of the slingo slango of the industry such as take immediate action, etc.
If you decide to take action at the speed you are comfortable with and have the financial resources available to run it as a profitable business you will probably be much happier in life, and sleep a lot easier.
Also realize that the term landlord means business owner as well as investor. The reality of it is if you're going to rent to people you are a business owner and viewing your assets that way is something that they fail to point out a lot of times in books and seminars urging you to take immediate action.
But then again if you want to take immediate action and you are comfortable with that go for it.
Good Luck!
