Tips when Purchasing your First Property!

What do you want to invest in?

There are single family homes, multi-family homes, condos, vacation homes, commercial properties such as office spaces and lodging and many more. Consider your situation and see what the road ahead will be. Weigh what heavily interests you and begin the search to find a property that will cash flow. For me, I am searching for a multi-family home, specifically a fourplex. My goal is to house hack the residence while I continue to serve in the military.

How will you fund your first investment?

There are plenty of conventional and unconventional ways of funding your first deal. You can take out a loan (Conventional Mortgages [30 year fixed rate or 15 year variable rate], FHA Loan, VA Loan) or aim for an unconventional method using the OPM (Other people’s money) method or perhaps a hard money loan (googling “methods similar to OPM in real estate”) will give you plenty to read upon. For me, I am planning to utilize the VA loan in funding my first investment.

The property needs repairs, what should you do?

If the property needs repairs, you need to prioritize building relationships with local contractors and finding out how much the repairs will run you and budgeting for that and then some. Extra is better than coming up short. Do your due diligence in finding the right contractors, speak to past customers and ask to see their past work. Quality Quality Quality, because your tenants will definitely test its durability.

Do you want to manage the property or outsource to a property management company?

This is a big concern for plenty of people. They are afraid of tenant nightmares where the tenants know who owns the property and will hassle them relentlessly. Do you want to be the person they go to when the property needs repairs, or deal with late payments. Outsourcing the duties to a property management company will solve these situations, but at a price. Budgeting roughly 10% of the rental income for this expenditure will be required. Now will it be a deal breaker for you, that’s a question to ask yourself. Doing your due diligence with finding a reputable PM company will be of extreme importance. Don’t be in the dark with your investment property, find a company that will communicate and get the job done in a timely manner.

You will do great when purchasing your first property. Remain optimistic and find a deal with numbers that make sense! Remember to do plenty of research and to remain a student throughout. Life is a learning experience and the willingness to adapt is of the upmost importance!

Thank you for reading my quick spiel of tips for when buying your first rental property. Please comment down below or message me privately for any questions you may have! Enjoy the rest of your day!

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