Jul 25 in Military to Millionaire
Here's a step by step to your first rental property.
- Step 0: Down payment (if necessary/not using VA home loan) but have 5% of total home value just in case
- Step 1: Have good credit (760+ is a good rule of thumb) but don't let this scare you away from homeownership, the VAHL works with flexible credit lenders (lenders are the people who give you the loan to buy the house)
- Step 2: Have proof of income/employment (disability percentages from the VA counts as income!)
- Step 3: Talk to lender to know exactly what you can afford via showing tax returns and credit report to see exactly what you qualify for in terms of interest rates (the lower the better)
- Step 4: Search for properties outside of what may initially seem attractive! you want to compare the immediate surrounding market vs the goal home you've identified (see if you're getting a good deal compared to what’s out there)
- Step 5: Determine if the property is cashnlowable (use home buying sites to determine what market prices are for similar homes) (use mortgage calculator to account for mortgage, property tax, insurance, miscellaneous expenses, vacancy) make reasonably lower offers if the purchasing price won't allow for you to make money each month when tenants occupy *there's alot more that goes into month to month costs than just the mortgage!
- Step 6: Location (don’t buy near annoyances and inconveniences such as loud highways or growing construction) (DO buy near schools as renters tend to have families or in close proximity to military bases for example)
- Step 7: Make offers, (keep in mind at least breaking even each month if not profiting) keep in mind cashflow at all times!
- Step 8: Inspections! (just because an offer is finalized doesn't mean you can't negotiate credit or a lower price from the seller if upon inspecting the property you find discrepancies that make the house worth less than the asking price)
- Step 9: Closing costs are usually 1% of closing costs (explore the options of the seller covering closing costs)
- Step 10: Renovate the property if necessary to attract buyers (show up on job site as much as possible during renovation process to ensure deadlines are being achieved and outcome is as planned)
- Step 11: Renting out (take professional pictures to better market property, respond to renters ASAP when inquiries are made, advertise property on as many websites as possible, screen tenants: I'll have to expand on this one separately, as it's an in depth topic)
- Step 12: Scaling up real estate portfolio (keep property for 12-18 months, then use profits for down payment on next property) rinse and repeat every couple years or when cashflow allows!
Below is the video I took notes from, Graham has been an awesome teacher in all aspects finance for as long as he's been on the platform.
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Here's a step by step to your first rental property.
skool.com/the-convoy-4792
How I make money online as an Active Duty Marine, college student, content creator, and business owner!
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